Jesus was a refugee

I regularly drive past a Christian church in a suburb of Brisbane that has a reputation for being a ‘nice’ area. When I drive past as a service is concluding, the attendees are going to their newish model cars to return to their homes that, if they live in the same area, are worth more than the median price across the City of Brisbane. While generalisations are frequently incorrect, the attendees at the service seem to be older and more conservative than the general population: in this case, however, the area usually votes for the conservative side of politics so the generalisation probably has some merit. A week or so ago the message board outside the church carried the message: ‘Jesus was a refugee’. As I drove past, I thought that it was an interesting statement to make in a ‘conservative’ area and, being on a sign outside a church, they probably have the evidence to support the assertion as well.

The Political Sword usually stays away from religion — and this piece won’t go there either except to question why conservatives invoke ‘their god’ as a basis for their ethics and morals while promoting actions that are diametrically opposed to those promoted by their religious beliefs.

Let’s start with the obvious one. Prime Minister Abbott is a practising member of the Catholic Church, as are a number of his ministers. Regardless of the display of wealth from the Vatican (something that it seems is being addressed by the current leader of the Catholic Church), members of the Catholic Church around the world do some amazing things to help their fellow humans live better and more fulfilling lives. For example, the Sisters of Mercy’s website details a number of programs with worthy aims, such as eliminating human trafficking and assisting the homeless. Funding for these actions comes from the operation of commercial enterprises such as the ‘Mater’ or ‘Mercy’ Hospitals.

In contrast, Christian Abbott and atheist Gillard (and you could argue that as ‘ten pound poms’ they were economic refugees) led the race to the bottom on treatment of refugees by imposing increasingly draconian conditions in the treatment of people who literally risk all to create a better life for themselves and their families — with assistance from the ‘out there’ Christian Kevin Rudd. How are the actions of any of these people in accordance with Christian morals and ethics?

Not that Australia’s leaders are alone in overtly claiming to have a moral and ethical compass derived from Christian beliefs while observation of their daily actions would suggest otherwise.

Nearly a millennium ago, the Pope of the time (Urban II) called upon the armies of Western Europe to go to war against those in the Middle East who followed the Islamic religion. The Islamic people then vowed to wage a holy war (jihad) against the Christians. The Western Europeans continued their crusades to the Middle East until the 16th century after which they were ‘distracted’ by the Reformation. Clearly both sides in the conflict thought that ‘God’ was on their side.

The Reformation was the commencement of the rise of the Protestant churches within the Christian ethos. Until the 1500’s, if you were a Christian, you were a Catholic. While there were some theological differences between the different branches of Christianity, the Reformation was in part due to perceptions of corruption within the ruling elite of the Catholic Church (the Curia) and a subsequent lessening of political influence enjoyed by the Pope.

The American Civil War (1861 to 1865):

… resolved two fundamental questions left unresolved by the revolution: whether the United States was to be a dissolvable confederation of sovereign states or an indivisible nation with a sovereign national government; and whether this nation, born of a declaration that all men were created with an equal right to liberty, would continue to exist as the largest slaveholding country in the world.

Yet, religion played a part in this battle over equality versus slavery, as reflected in the speech President Lincoln gave at his second inauguration in 1865, a month before he was fatally shot. The relevant section is quoted below:

Each looked for an easier triumph, and a result less fundamental and astounding. Both read the same Bible and pray to the same God, and each invokes His aid against the other. It may seem strange that any men should dare to ask a just God's assistance in wringing their bread from the sweat of other men's faces, but let us judge not, that we be not judged. The prayers of both could not be answered. That of neither has been answered fully.

The history of conservatives marginalising their own people while claiming to be representing all, as Lincoln was suggesting above, continues in the USA. The USA, however, also has a long and proud history of ‘protest songs’ that question actions taken by, usually, Republican Presidents such as Nixon, Bush the elder and Bush the younger. It is easy to suggest that Bob Dylan made, and is still making, a living from protest songs. The Dixie Chicks suffered severe criticism for prefacing a song at a London concert with criticism of George W. Bush sending troops to Iraq and contemporary pop musician Pink released ‘Dear Mr President’ during the term of George W. Bush — it still resonates today.

This piece started with a reference to an outwardly conservative Christian church in suburban Brisbane and its statement that Jesus was a refugee. It seems that humans have a long history of discrimination against those who we perceive are not our equals. Superficially we’ve looked at Christians’ treatment of Muslims nearly a millennium ago, treatment of slaves in the USA and, in recent history, those that are less fortunate than the majority. It seems that traditionalists have commenced these battles — and progressives have railed against them.

So what is the difference between the Abbott and Gillard families coming to Australia as economic refugees in the 1960’s and current refugees attempting the trip from our northern neighbours?

Is the answer superior genetics?

Genetically, Abbott, Gillard or Rudd’s personal gene pool is very similar to that of any other person alive.

If it is religion, the differences again are not that great.

Like Judaism and Christianity, Islam teaches that there is one God in the universe, giving Muslims a monotheistic worldview Also like Judaism and Christianity, Islam teaches about the ministerial office of the prophet, although not all of these faiths agree on who is, and who isn't, a prophet. For example, Christians believe John the Baptist was a prophet and Jews and Muslims don't. And Muslims believe that Muhammad was a prophet, yet Jews and Christians don't. All three faiths also believe in an afterlife, although the makeup of those destinations can be immensely different from each other.

Both faiths insist that you must be a practising member of the faith to enjoy the ‘afterlife’. Muslims and Christians also share similar beliefs regarding how they live their life on earth will affect their ‘afterlife’ (here for the Muslim belief and here for the Christian version).

If the reason for the failure to address the arrival of refugees with humanity is because we as a nation didn’t ask them to come, then the Indigenous people of Australia didn’t ask the English to invade in 1788 (and it’s a pretty good bet to surmise they themselves didn’t ask permission some 40,000 years earlier), just as the English and French most likely didn’t take the opinions of the ‘first peoples’ in the US or Canada into account either.

Is it because those of the Muslim faith want to take over the world? If you believe the media, maybe: it is more likely, however, that only a small radicalised group within that religion has such lofty aims. Don’t forget the Catholic Church was responsible for the Crusades to the Middle East (which occurred for a period of around 400 years) and that up until very recently the Catholic Church claimed the only way to ‘salvation’ was to be a practising member of the Catholic Church.

It doesn’t make sense that anyone or anything can support two diametrically opposed arguments at the same time to the elimination of all other arguments — as Abraham Lincoln alluded to in the inauguration speech discussed here. In a similar way, those that use a religious book promoting living a good and just life to justify murder, rape and pillage (such as routinely demonstrated in the religious wars that have engulfed parts of the world in the past millennia) have to be dishonouring the text they claim to be a fundamental belief.

Who demonstrates the morals and ethics of their chosen religious text better? Is it the conservative political leaders who stand by and watch people starve or suffer ill health or the Sisters of Mercy and other religion-based organisations that actively channel profits from provision of services to help those less fortunate? Is it those conservatives who suggest that ‘stopping the boats’ is a worthy aim or those that suggest that Jesus was a refugee and accordingly we should assist and care for those that have felt the need to make the refugee journey? Is it the conservative people who invade a country and impose a rule of law or those with religious beliefs that go about their daily lives and attempt to help someone in need? Without being religious, I know where my vote would go. It isn’t to the conservatives.

What do you think?

Words, words, words

Lenore Taylor reported in August that Tony Abbott had told a ministerial meeting that the party had not broken any election promises, not one. My first reaction was that this was the sign of a narcissistic personality, someone who cannot bear to be wrong. On second thought, I pondered that perhaps it is true. After all, as Humpty Dumpty said:

When I use a word, … it means just what I choose it to mean — neither more nor less.

Was Abbott merely playing Humpty Dumpty in Through the Looking Glass, and using words, words, and more words as he intended them, not as the electorate might understand them?

Take a careful look at Abbott’s and Pyne’s statements regarding education and the Gonski reforms. ‘Gonski reforms’ — what are they? ‘Gonski’ is not mentioned, although the media continued to refer to Abbott’s proposed education funding by the shorthand ‘Gonski’. Why does this make a difference? — because the Gonski funding reform was actually about improving funding for disadvantaged schools and that was a key aspect supported by the electorate.

Thus, when Abbott said he was on a ‘unity ticket’ with Labor on education, people took that to mean that he supported Gonski, but that wasn’t what he said, although it was clearly the impression he meant to leave. Mainly he spoke about funding and implied that there may be changes, by emphasising that an Abbott government would reduce the ‘command and control’ (a military phrase, for which he has a penchant) in Labor’s funding model. So although he spoke about the ‘funding envelope’ and promised no school would be worse off, the media coverage and the public perception continued to relate that to ‘Gonski’ and the (unspoken) issue of educational disadvantage. That led to further problems and the famous double backflip.

On 26 November 2013 Pyne announced that the new government would only honour the Gonski funding model for 2014 and develop a new funding model for subsequent years. He suggested that, as well as Queensland, Western Australia and the Northern Territory not being included, Victoria and Tasmania had also ‘not signed bilateral agreements’ with the federal government. What the premiers of those latter two states quickly pointed out was that they had signed ‘heads of agreement’, or in other words the outline of the agreement, or an in-principle agreement. But according to Pyne, in Humpty Dumpty words, they had not signed the agreement. When does an agreement become an agreement? Even courts recognise that verbal agreements can be legally binding.

Pyne blamed the press gallery for the eruption that followed, suggesting ‘It’s not my fault if some members of the press gallery don’t understand the complicated nature of the school funding model.’ Abbott supported him, saying that ‘Our pre-election commitment was that there will be exactly the same quantum of funding …’ — here we are back to the ‘funding envelope’, perhaps the same envelope on the back of which budget calculations are made.

Eleven days later, Abbott, with a sheepish looking Pyne beside him, announced that the government would provide funding for four years in accord, in dollar terms, with the previous Gonski model. Pyne added:

… no school, state or territory, can be worse off because of the Commonwealth’s actions.

But Abbott was also back onto ‘command and control’, insisting his funding would remove the control that the Canberra bureaucracy would have been able to exercise under the original Labor agreements on funding. What he was saying effectively removed any concept of overcoming educational disadvantage, but that was never reported and perhaps not so easily seen amongst the words he used. That did, however, come back to bite Abbott and Pyne when they were forced to concede that they could not guarantee that no school would be worse off because, in reality, how the money was spent was now a matter for the states — no more ‘command and control’. Pyne’s little addition that no school would be worse off ‘because of the Commonwealth’s actions’ was vital: the fact he phrased it that way suggests that he was already aware that the ‘promise’ of no school being worse off was in tatters.

That announcement came after Pyne had reached ‘in principle’ agreements with the previous non-signatory states. Is an ‘in principle’ agreement the same as a ‘heads of agreement’? While Pyne had earlier claimed that Victoria and Tasmania had not signed up because they had only signed ‘heads of agreement’, now he was claiming validation of his approach because he had an ‘in principle’ agreement. For Pyne, like Abbott, an ‘agreement’ is what he says it means.

Embedded in that debate was whether or not an amount of $1.2 billion actually existed. Labor had initially kept that amount for the states and territory that had not signed up but it was removed in the PEFO prior to the election. That allowed Abbott and Pyne to claim that they were putting an additional $1.2 billion into education. If it was previously foreshadowed, is it an extra amount? In the sense that it had been temporarily removed, perhaps it is, but it was always intended that those jurisdictions should receive some increase in funding. In Humpty Dumpty’s world, our normal understanding of words is not sufficient to clarify when money actually exists, and that also became central to the 2014 budget.

The education debate helped give rise to the classic $80 billion ‘savings’ in education and health in the budget. Labor attacked these as ‘cuts’. What is the difference between a ‘saving’ and a ‘cut’? — or is there a difference?

When Labor attacked it as a ‘cut’ Abbott responded that it did not exist as it was never included in any Labor budget, so nothing had been ‘cut’. The dollar amount certainly wasn’t in Labor budgets but Labor’s funding formulae would have led to increased health and education funding over a ten year period. The deals Labor had negotiated on education lasted up to six years (not just the four that Abbott was then supporting) and were ‘back-loaded’, meaning more money was paid in the later years rather than at the start of the agreements. The details do not really matter because if the money wasn’t there can it be a ‘saving’? It is a little like a game some mates and I used to play when we stayed out too late at Friday night drinks after work: we would calculate how much we had ‘saved’ by each bus that we missed. Abbott avoids the word ‘cut’ but still insists it is a ‘saving’. For the States it is a cut in the sense that they will now not receive, in the future, money that they were expecting, even if that expectation was not set in concrete. It is the same as someone being told they can expect a pay rise and on that basis planning to buy a new car but the pay rise doesn’t eventuate, and so, nor does the new car. For Abbott, that means they haven’t lost anything but he has saved by not giving the pay rise. See what I mean about Humpty Dumpty words. In this context, Abbott is saying that it can only be a ‘cut’ if it is the reduction of something the states already have, ipso facto, if the states don’t yet have it, it’s not a cut!

The changes to health and education also reflect the meaning of ‘agreement’ as used by Pyne. When Abbott was forced to concede that cuts to health funding would occur in the current financial year, and not four years into the future as he originally maintained, that involved scrapping or making unilateral changes to a number of agreements with the states and territories, particularly the national partnership agreement on public hospitals. So even a negotiated and signed agreement may not be an ‘agreement’ when the word is used by Abbott and Pyne.

In defending the budget, Abbott said it was ‘fundamentally honest’. ‘Fundamental’ has a few inter-related meanings:

  • forming a necessary base or core, of central importance
  • relating to the essential nature of something or the crucial point about an issue
  • so basic as to be hard to alter, resolve, or overcome
If used in the first way, it echoes John Howard’s core and non-core promises. Or if used in the second way, is the budget only honest in its ‘essential nature’, perhaps implying there may be parts that are dishonest? Would he dare suggest that the budget is so honest no-one could challenge it (the third meaning)? I would think not but don’t put that beyond Abbott. In fact, in Humpty Dumpty speak, Abbott is using the word in all three ways. It leaves him free to respond to questions in any way that suits him at the time.

He went on to say that ‘the most fundamental commitment I made was to get the budget back under control.’ It is true that the opening promises of his 2013 election launch were:

We’ll build a stronger economy …
We’ll scrap the carbon tax …
We’ll get the budget back under control …
We’ll stop the boats.
And we’ll build the roads of the 21st century …

No mention of health or education, the aged or unemployed, or other welfare recipients, at least not in these opening ‘core’ or ‘fundamental’ promises. If you look at them, they are the promises that he does appear to have done most to keep (even if his view of a strong economy is somewhat at odds with the views of those outside the IPA or those who are not economic rationalists). Given his history of not reading important documents, perhaps he can only remember those opening promises, or perhaps his advisers have not yet gotten past them. Whatever the reasons, it appears that these are Abbott’s ‘fundamental’ promises. Did the electorate understand before they voted that ‘fundamental’ related only to the opening promises of his speech and not to the many other promises made in the subsequent pages? Or was Abbott saving that explanation for later?

Another matter was in March when Abbott and Morrison celebrated that it had been 100 days since an asylum seeker boat had reached Australian shores. Note that it was Australian ‘shores’. What do they mean by ‘shores’? They mean actual landfall because it does seem that at least one boat was in sight of Christmas Island, before it was taken back to Indonesian waters, which would suggest it was in Australian territorial waters (extending 20kms off shore). And perhaps it does not include reefs. Another popular site for people smugglers back in 2000-01 was Ashmore Reef, another Australian territory less than 150kms from the Indonesian island of Rote. We have heard nothing of it under Operation Sovereign Borders. If a boat had landed there, we would no longer be told but they would definitely be on an Australian ‘reef’, though perhaps not a ‘shore’. What may be a ‘shore’ can thus be very flexible — it may depend on whether the tide is in or out! We have also learned in the High Court challenge regarding the boat from India that ‘shores’ also does not include the deck of an Australian vessel, even though that is effectively Australian territory.

Now just a word or two on Abbott’s military phraseology. We have Operation Sovereign Borders and Operation Bring Them Home, which are self-explanatory. When Abbott and Morrison first announced Operation Sovereign Borders at a joint press conference in Brisbane prior to the election, Abbott said of it, ‘we will have the appropriate command and control structures’. Recognise that phrase? In this context, he was using it to highlight his ‘adult’ approach to asylum seeker boats but in the education debate he used it as a pejorative phrase describing Labor’s approach. Is it a positive way to approach policy issues or a negative way? Obviously Abbott can use it as both. ‘Command and control’ is bad if it is Labor but good if it is Liberal. Does that sound like Humpty Dumpty?

Abbott promised an ‘adult’ government. But he has also used that word in a couple of other contexts. When the state governments reacted angrily to the education and health ‘cuts’ in the budget, Abbott said:

… we make no apologies for wanting the states to be grown up, adult governments that take responsibility for the programs that are theirs, for the institutions that they run.

Being an ‘adult’ government, then, is not something that automatically applies to Liberals but only to Abbott’s own government. Even state governments of his own political persuasion are not ‘adult’ if they can’t manage the reduction in future funding, and it is not Abbott’s problem now, it is theirs, so they need to grow up. And he said of the unemployed, who would now not receive unemployment benefits for six months, that ‘Being an adult means taking responsibility for the choices you make and making the best possible choice in the circumstances you face.’ Has Abbott been taking responsibility for his choices? Perhaps not, but that does not matter because the way he uses the word it is his government that is ‘adult’ by definition — everybody else needs to be told when to grow up and how to be ‘adult’.

Abbott promised going into the election that his would be a government of ‘no surprises’. Well, certainly no surprises for Abbott. Like Humpty Dumpty, he was the only one who understood what he meant.

In the end none of this matters. In a quote from Abbott’s swearing in as prime minister, which I have referred to a couple of times in earlier pieces, he said:

We hope to be judged by what we have done rather than by what we have said we will do.

Consider that carefully. He is basically saying ‘all bets are off: as from the day I have become PM, we start afresh, ignoring all I have said before, and only what we actually do from now on counts’. Why wasn’t that statement given more prominence by the media at the time? It is a catch-all statement wiping the slate clean of election promises and starting over: it is a clear statement that his election promises were vacuous.

As with so many of Abbott’s statements, it is easy to find another that is contradictory, unless we understand and accept that he uses words as Humpty Dumpty did — they mean what he chooses them to mean, no more and no less!

What do you think?

Middle Australia: a new narrative for Labor?

Tucked away in one of the last Fairfax-Nielsen public opinion polls in mid-July is the intriguing fact that although the ALP was leading on a two party preferred basis, and Bill Shorten was preferred as Prime Minister to Tony Abbott, Abbott was ‘way ahead of Mr Shorten on the issue of “vision for Australia's future'’, leading 54 to 38 per cent’. It’s an odd finding in the sense that while voters appeared to think Abbott has a vision, a good number of them don’t seem to like it. It’s a worrying finding in that many voters don’t think Labor has a vision. A similar problem dogged Julia Gillard as Prime Minister: journalists said she didn’t have a ‘narrative’, a story that linked together Labor’s policies into a coherent vision.

I find this a bit surprising, because I’ve always assumed Labor does have a vision that has been summed up as a ‘fair go’. But apparently this vision either doesn’t resonate with voters or isn’t being adequately communicated. Or maybe Labor isn’t being true to it?

I can’t really comment on what appeals to voters; after all, they voted for Tony Abbott. A small but significant number of them have since changed their minds, at least for the time being, perhaps having seen in Joe Hockey’s budget just what vision the LNP actually has for Australia — free markets, small government and burgeoning inequality. It’s worth noting, however, that even when public opinion polls were looking dire for Labor before the last election, many of the policies of the Labor government were actually quite popular. Essential polling suggested that a majority of people would be prepared to pay more taxes for better government services, and spending on health and education, the National Disability Insurance Scheme and the NBN all attracted majority support. More recently, polls suggest that a significant majority support putting a price on carbon. So there’s at least some evidence that voters approve of policies whereby government intervenes in the free market to even up the playing field, or to require polluters to pay for their pollution.

The result of the last election is therefore proof positive that Labor isn’t adequately communicating its message. Of course it was difficult for the party to do this when the Murdoch-owned print media was solidly — ridiculously, extravagantly — against them. Then there were the negatives: the changes of leadership, the disunity, the sense that the government was somehow not legitimate. Abbott’s relentless negativity was allowed to dominate the debate, leaving little free air for a more positive message from the government. Labor policy was suffocated in the public mind, partly by clever tactics by their enemies. But maybe the message wasn’t clear enough. It’s unfortunately not good enough to make logical arguments in favour of sensible policies; you have to grab the public imagination as well.

It’s hard to judge how Labor in opposition is selling its policies. At this point in the electoral cycle, conventional wisdom dictates that an opposition is not required to present alternatives to government proposals: their role is supposed to be to critique what the government puts forward. Anything they do say is unlikely to be given prominence in the mainstream media. Furthermore, Bill Shorten has said that the first year in opposition should be spent reforming the party; new policy development should follow on from this, the assumption being that new members should be able to contribute through reformed structures to what the party decides. I don’t entirely buy this. The party needs some basis on which to offer criticism; what they say is wrong with the government’s proposals should reflect Labor’s vision. Specific policy proposals can possibly wait until nearer the next election, but everything Labor members say — in parliament, in press conferences, in their electorates — should reflect Labor’s vision. So it’s worth being clear what that is.

There are also obviously some areas where the problem is not lack of stated vision, but failure to live up to it. The most glaring example is Labor’s policy on asylum seekers — check out this bitter cartoon showing Julia Gillard putting out ‘the light on the hill’ because ‘it attracts the boats’. Labor will struggle to present itself as a party that believes in a fair go, however expressed, while it continues to defend off-shore processing on Manus Island and Nauru. There is no easy solution to the asylum seeker dilemma, but the present position is poisoning any attempt by the party to portray itself as caring about people.

They aren’t safe on economic and social policy either. Labor in office faced the same budget realities that Joe Hockey is dealing so poorly with now and, if re-elected, would face them again if they continue to accept the prevailing economic doctrines. The revenue side of the budget is in crisis, with receipts falling below spending, even if, as under Wayne Swan, spending is also cut back. Think of the reaction to the Gillard government’s placing of single mothers on Newstart after their youngest child turned 8, even though this was already policy for new entrants into the scheme. Labor tried to run the line that being in work is better than being on welfare, and so it is, but this means creating more jobs, and government has only limited capacity to influence employment these days. Even if Labor can resist the pressure to promise balanced budgets, it will likely make cuts to existing entitlements, and while there is room for reduction of welfare for the well off, such as changes to superannuation, on past evidence there could be problems with fairness in selling a message either promising cuts or, much more justified but harder, increasing taxation.

I think, however, the problem with Labor’s vision is deeper than asylum seekers, or single mothers, or any other group they might in the future fail to treat fairly. Labor is, like most centre-left parties the world over, still wedded to a neo-liberal understanding of economics. After all, they were the government under Paul Keating that did most to usher in the era of the floating dollar, reduced tariffs, privatisation of public assets, lower taxation and spending cuts. At the heart of this set of policies is the belief that because wealth trickles down, measures that promote equality are only achieved at the expense of greater national prosperity. You can have a safety net, but only if you can afford it. Look at the whole thrust of the Hockey budget, with its narrative that welfare spending is out of control. It’s all very well to say that Australia is a rich country and can afford proper welfare but even when times are good it’s hard to convince people that they should give up something for someone else. It’s the old ‘you’re working to pay someone else’s welfare’ lifters and leaners line that Hockey is still using. Neo-cons can use the language of fairness too, when the trickle-down paradigm remains unchallenged.

Labor needs to come out decisively with a new story. Small government, tax cuts for the rich, competition in health and education are all recipes for greater wealth inequality — Labor must unequivocally reject all elements of such policies. To their credit, some Labor figures, such as Andrew Leigh and Jim Chalmers, are talking about wealth inequality and the destructive effects it has on communities. But the party as a whole still uses the language of ‘the fair go’ in ways that are compatible with the trickle-down theory. The ‘fair go’ addresses the people who lose out under neo-liberal capitalism, but doesn’t look at the rich — those who benefit completely disproportionately from the current economic arrangements. We need a story that values the real wealth producers in society.

Economists’ views, even in the mainstream, are changing. Many now agree that trickle-down economics doesn’t work for the public good. And a significant number are now arguing that prosperity and greater equality aren’t alternatives; in fact you can’t have one without the other. Rich people do not generate most of the jobs in society — small business and middle class consumers do. My consumption fuels your business; the more people in a position to consume, the more profitable your business. Instead of top-down economics, we need ‘middle-out’ economic policies.

According to Eric Liu & Nick Hanauer, its foremost proponents, ‘middle-out’ economics offers a new, or at least revived, explanation of where prosperity comes from — ‘a "circle of life"-like feedback loop between consumers and businesses’ that creates conditions ‘that allow both middle-class consumers and the businesses that depend on them to thrive in a virtuous cycle of increasing prosperity for all.’ This means that a prosperous economy revolves not around a tiny number of the very rich but around a great and growing number of middle-class consumers and small businesspeople. It follows from this, Liu and Hanauer argue, that:

  • Demand from the middle class — not tax cuts for the wealthy — is what drives a virtuous cycle of job growth and prosperity.
  • Rich business people are not the primary job creators; middle-class customers are. The more the middle class can buy, the more jobs we'll create.
  • A nation has the right and the responsibility to decide where the jobs created by its middle class will be located — here or off-shore.
  • Trickle-down has given us deficits and a decimated middle class.
  • Middle-out economics means investing in the health, education, infrastructure, and purchasing power of the middle class.
  • Middle-out economics marks the difference between what is good for capitalism broadly versus what protects the vested interests of a select group of capitalists narrowly — and it invests in the former.
You can read further explanation of this term here, and see what sort of policies arise from this view of how the economy actually works best for the community. Unsurprisingly, they include creating a truly progressive tax system, investing in the skills and health of the middle class, pushing for a fairer and more equitable split between workers and owners of the value created by enterprises, and investing strategically in the industries of the future.

Labor already has policies in most of these areas — though it needs to do more. But even more important, it needs a message that isn’t just about improving welfare, or even levelling up the growing inequality that arises from the unregulated free market. It needs a message that can’t be derailed by the cry of class war — however spurious that cry is. It’s not just about a fair go, and greater equality of opportunity. These messages will fail if the electorate thinks the Liberals are better economic managers, that fairness is unaffordable, and that wealth will, as they claim, trickle down. Labor needs to tie its policies into a narrative that embraces ‘middle-out’ economics — a narrative that values ordinary people as workers, consumers and taxpayers, who together create the wealth of our society.

What do you think?

There is no ‘I’ in Team

Welcome to ‘Team Australia’.

The usual connotation of the word ‘team’ is a group of people that pull together for the common good. Business these days seems to encourage people to form teams, whether the purpose is the development or implementation of a new product, or to attempt to build comradeship between employees.

The concept of ‘team’ is so ingrained into Australian culture that the different bus depots in the Brisbane Transport bus network compete for the best decorated bus at Christmas, the competition being judged by Brisbane’s Lord Mayor. It apparently builds teamwork and co-operation between the drivers at the different depots.

The theory seems to be that the process of building the ‘team’ will encourage the participants to complete their jobs at a higher level than they would otherwise because they have a sense of belonging to a like-minded group.

Socially most people have been involved with a sporting teams — from the local Under 7’s, who usually have only a vague idea that the ball has to be hit, kicked or thrown in a general direction (and no one should really care if it isn’t), to the high achieving athletes who are paid millions per year to demonstrate exceptional skills and ability in a particular area of sport. At the higher levels of sport, large quantities of electrons and printers ink are either used or wasted (depending on your opinion of the sport in question) in analysis of the events of the past week and how those events translated into a win or a loss last weekend.

Over the time the team is together, good coaches will attempt to engender a sense of equality across all the members of the team — and demonstrate that all members have skills to contribute, regardless of their time with the group. The ‘old hands’ will have the ‘culture’ of the organisation (regardless of the team’s purpose) while the newcomers will inject some different experiences to the group. The longer serving members will, if they have any intelligence, listen to the different ways of doing things and, if found sound, may incorporate them into existing programs which will improve the entire group’s performance in the future. The newer members will assimilate the ‘culture’ of the team from the longer serving members.

In an environment that promotes equality, it stands to reason that if one or two of your team mates are having an ‘off’ day, you will step in to give them a hand. If someone is ‘having a blinder’ (to flog the sporting metaphor to death), other members of the team are usually inspired sufficiently to improve their own performance. Regardless of the performance on the field, there is usually a form of celebration after the event to either congratulate or commiserate with each other.

So, if the Abbott Government comprises the coach and support staff for ‘Team Australia’, it stands to reason that they will be demonstrating to us, the team members, that we are all equal, all capable of greatness and, regardless of how long ago or how we got into the team, we are all welcome and valuable players. Let’s look at the evidence.

1. A team is a group of equals.

In the budget, the Abbott government introduced a $7 co-payment when accessing primary health services — effective from July 2015. (The measure is yet to be passed by the Senate.) The University of Sydney suggests that the elderly and chronically ill will be disadvantaged as a result of this measure:

"The introduction of co-payments won't be shared equally," report co-author Dr Clare Bayram said.

"It will particularly affect people who need to use more medical and related services, such as older people and those with chronic health conditions.

"The proposed co-payments regime is likely to deter the most vulnerable in the community from seeking care due to higher costs that they would face."

Also in the budget, unemployed Australians will have to meet obligations to apply for 40 jobs per month, as well as performing a number of hours of community service (dependent on age) in order to be eligible for the ‘Newstart’ (unemployment) benefit:

Australians under 30 will be required to do the heaviest lifting in order to keep their dole payments.

Those in the youngest working age bracket will be asked to work a minimum of 25 hours community service a week and apply for at least 40 jobs a month.

If you are over 60, you do not have to work — but volunteering to do so would be appreciated! Probably the best evidence of the process is this:

Work for the dole is already an optional program for all job seekers. As part of the recent budget, the government introduced mandatory work for the dole in 18 high unemployment trial locations. That program applies to long-term unemployed people who are 30 or younger.

The government will not wait for the outcome of those trials to extend the program to job seekers across the country.

Job seekers aged under 30 will be ineligible for payments for six months after applying for benefits despite taking part in work for the dole and being required to apply for jobs.

Thousands of Australians who are under 30 are in relationships, have mortgages and/or children. Is it equitable that this group of people could literally lose everything if their employer ‘restructures’? We see regularly in the media that hundreds, if not tens of thousands, of workers are ‘no longer required’ by a number of companies (as well as the current federal government when elected), and we are also seeing an increasing rate of unemployment. One could also ask how they are going to afford the expense of making the 40 job applications a month or get to the places where they will ‘work’ if, because of their age, they are not eligible for any government support for six months. It looks like some are more equal than others.

2. Members of a team are capable of greatness.

Australians are used to hearing about how great it is to live here. In comparison to a number of countries around the world, we aren’t doing too badly. However in a global environment where the emission of carbon is a concern due to the effects on the atmosphere, Australia is removing an effective carbon price.

There is no real difference between a carbon pricing scheme and parking regulation. In the case of carbon pricing, the emitters of a product that has been demonstrated to cause detriment to the quality of the climate globally are charged for emitting the product. The emitters have two choices — either pay the price or change their production process to reduce or eliminate the emission of carbon into the atmosphere. Councils across Australia regulate parking for a number of safety and accessibility reasons — if you are prepared to reduce other road users’ safety or accessibility due to your own perceived needs, you will be fined for the ‘privilege’ of doing so. The current government’s ‘Direct Action’ policy is similar to paying a reward to everyone who does not park properly.

Regardless of the semantics of the repeal of the carbon pricing scheme, a number of internationally renowned commentators were appalled:

It has been led by EU Climate Commissioner Connie Hedegaard and environmental activist Al Gore, who said Australia was "falling behind other major industrialised nations in the growing global effort to reduce carbon emissions".

Conservation groups have also been scathing, and many experts have been left scratching their heads.

Roger Jones, a Research Fellow at the Victoria Institute of Strategic Economic Studies, called the repeal "the perfect storm of stupidity".

"It's hard to imagine a more effective combination of poor reasoning and bad policy making," he said.

"A complete disregard of the science of climate change and its impacts. Bad economics and mistrust of market forces."

The Association for Tropical Biology and Conservation, a group of close to 600 scientists, released a statement that said:

Securing Australia's environmental heritage for its future citizens and the global community will be undermined without strong environmental legislation and leadership that empowers government agencies, communities and local environmental organisations to protect rainforests.

Hardly evidence of engendering the potential for greatness in the team, is it?

3. All members are welcome and valuable members.

There is still a long way to go before all members of the ‘team’ can feel welcome and valued. There is considerable discussion on the inequity shown to refugees that arrive here in leaky boats versus 747’s — and the treatment each group receives.

Reported widely in the past few months has been a number of racially-based attacks on public transport in Sydney. Two of them are here (where the woman responsible was found guilty) and here (where four teenagers were arrested early in August).

The first racist incident ‘went viral’ on the Internet prior to any action being taken to identify and deal with the offender. The authorities seemed much more willing to act quickly in the second incident. While The Conversation’s article reporting the first incident suggests that the reaction to the offensive behaviour may be a turning point in treatment of racial abuse in this country, there is still a long way to go.

In 1995, the Federal Government passed the Racial Discrimination Act which, in part, made an act discrimination if it was intended to ‘offend, insult, humiliate or intimidate’ on the basis of ethnic origins or race. In 2011, radio and television presenter Andrew Bolt fell foul of this law when he claimed that nine ‘pale-skinned’ indigenous people ‘had chosen to identify as indigenous for professional or financial gain’. Then Shadow Attorney-General George Brandis, writing in The Australian on September 30, 2011 claimed:

By making the reasonable likelihood of causing offence or insult the test of unacceptable behaviour, in any political context, section 18C is a grotesque limitation on ordinary political discourse. While some have pointed out the analogy with the limitations on free speech in the defamation laws, the threshold at which speech may be unlawful because it is defamatory is much higher: the traditional formula is that it must be likely to bring the victim into "hatred, ridicule or contempt"


Section 18C, as presently worded, has no place in a society that values freedom of expression and democratic governance. If the Bolt decision is not overturned on appeal, the provision in its present form should be repealed.

Apparently Bolt and his wife dined with Abbott soon after the judgment and Brandis made it a high priority to remove the ‘offending’ Section 18C from the legislation upon being appointed Attorney-General in the Abbott Government. As the ABC reported in April:

In a heated exchange in parliament, Senator Nova Peris — the first Indigenous female senator — asked Senator Brandis: "Won't removing 18C facilitate vilification by bigots?"

He responded: "People do have a right to be bigots, you know. In a free country, people do have rights to say things that other people find offensive or insulting or bigoted."

The repeal of Section 18C did not pass parliament. Abbott rang Bolt early in August and advised that the proposed repeal was not going to happen. Bolt then told the world on his blog and claimed:

To associate it with me meant so many people of the left thought that any law that could be used against me must be pretty good, and I think that’s poisoned the debate.

The ironic thing to note (apart from Bolt’s ‘its all about me’ comment) is that the IPA (a conservative ‘think tank’) is so offended that they still can’t offend, insult, humiliate or intimidate on the basis of ethnic origins or race, that they are planning an anti-Abbott advertising campaign!

Abbott’s ‘Team Australia’ can be compared to Queensland Premier Newman’s ‘Strong Choices’ campaign, where every comment by the LNP Government has somehow linked back to the chosen phrase for some time. See this article in the Brisbane Times for some pithy examples. At the end of the day, is it all hollow rhetoric and marketing to ensure survival beyond the next election?

While there is no “I” in team, there are three in ‘vindictive’ as well as one each in ‘horrible’ and ‘racist’. Is it possible to have a team where the Government is vindictive to those who can’t find work, horrible to our senior citizens who potentially can’t afford primary health care, or racist to those who are perceived to be different?

What do you think?

A year in Abbottland

Twelve months into the Abbott government, its misdeeds could fill an entire book. But here I’ll attempt to summarize them, as it’s important we remember them all to maintain the rage. If you think this article is too long, blame Tony Abbott.

For 28 months, they promised to reveal all their policies and budget cuts ‘in good time before the next election’. In reality, they walked away from unwanted questions, hid major policies and cuts until 36 hours before the election, hid others until after the WA by-election, and continue to hide behind a series of reviews stacked with hand-picked ideologues who anyone can see will recommend a radical right-wing agenda.

They promised to govern for all Australians, and not pick winners. In reality, their every decision makes the rich richer, the privileged more privileged, and the powerful more powerful, while finding ever more humiliating ways to bully the poor, disadvantaged, and powerless. Abbott (along with his unprecedentedly powerful chief of staff Peta Credlin) has appointed a cabinet containing just one woman, no non-Christians, and no climate or science minister; surrounded himself with advisors who look, talk, and think like him (i.e. old, male, conservative, climate-change-denying business lobbyists); sacked public servants perceived as disloyal; abolished multiple expert advisory bodies; reinstated knights and dames; and failed to condemn extreme views expressed by colleagues and advisors.

They promised strong, stable, accountable government with a long-term vision for the future direction of the nation. In reality, they are not delivering this because their ideology is to palm off major decisions onto unelected corporate leaders ruthlessly pursuing short-term self-interest. The supposed wisdom of the market is disrupting, among other things, the formerly stable climate that has sustained humanity for millennia.

They promised to address climate change at no cost. In reality, they have approved, subsidized, and talked up relentless expansion of the fossil fuel mining industries driving the problem (including Clive Palmer’s mega coal mine); purged the words ‘climate change’ and ‘renewable energy’ from government communications; misquoted Wikipedia to deny the link between climate change and worsening extreme weather; attacked the Australian Research Council for funding too much climate science; abandoned the upper end of Australia’s emissions target range; snubbed then played an obstructive role at Warsaw climate talks; refused to contribute to a global climate fund; left climate off the agenda of the upcoming G20 conference; scrapped or scaled back their proposed climate programs; abolished most existing policies on climate, renewables, and energy efficiency (cutting total spending by three-quarters); and tried to abolish the few remaining ones (including the Renewable Energy Target, being reviewed by a panel stacked with deniers). These policies are to be replaced by paying polluting companies to do essentially nothing.

They promised household compensation without a carbon tax. In reality, they are trying to increase fuel tax for ordinary motorists while compensating mining companies and repealing the carbon price paid by polluting companies. (There is of course an environmental argument for raising fuel tax, but the inequity in Abbott’s strategy cannot be overlooked.)

They promised to improve the environment. In reality, they have slashed federal environmental programs; turned the Great Barrier Reef into a coal shipping lane; sought to revoke the World Heritage status of Tasmanian forests and claimed loggers are conservationists; suspended all new marine parks; presented redirected funds for tree-planting as new; delegated their environmental protection powers to the states; and granted themselves legal immunity from challenges to past environmental approvals.

They promised to look after rural communities, in particular, to protect agriculture by reining in coal seam gas (CSG). In reality, the Coalition is dominated by the Liberals (who have boasted about hoodwinking the Nationals); their policy is to extract every molecule of gas and they’ve attacked NSW’s CSG restrictions; and they are ignoring the climate crisis threatening the very existence of agriculture and rural towns.

They promised to protect Australia's sovereignty. In reality, they are agreeing to investor-state dispute settlement (ISDS) in free trade negotiations, giving multinational corporations the power to sue a government for any policy that hurts their profits. This will have a gagging effect on the ability of governments to introduce laws to hold corporations accountable. They continue to negotiate the Trans-Pacific Partnership (TPP) which involves ISDS.

They promised to liberate us from big government, and no mandatory data retention. In reality, only corporations and other elites will be freed from regulations which hold them accountable to the voting public, while women are held back, minorities and disadvantaged groups punished, and asylum seekers imprisoned with no right to know why. They’ve stymied the ACT’s marriage equality laws. They’ve cut funding to the Human Rights Commission and appointed as ‘freedom commissioner’ an ideologue who advocated shutting down the Occupy protests and believes corporations have human rights. They’ve withdrawn a grant to the Jewish Holocaust Centre, among others, that they see as pork-barrelling to minority groups. They’ve abolished an advisory body on corporate crime, cut funding to the corporate regulator, and watered down consumer protections on financial advice amid a banking scandal. They’ve abolished the independent monitor of anti-terrorism laws. They’ve announced draconian security policies which would remove a sunset clause on police powers to detain and search people, make it easier to arrest suspects without a warrant, ban Australians from visiting certain countries, allow ASIO to suspend passports, and remove the presumption of innocence for terrorist offences. They’ve defended spying on behalf of fossil fuel companies, and they want the power to routinely spy on every Australian online, a policy even they can’t explain — supposedly to prevent terrorism and crime when it’s difficult not to conclude the government represents a more present threat.

They promised to increase free speech (especially for criticism of powerful people), protect media and political freedoms, and support public broadcasters. In reality, they’ve attempted to promote free speech only for racists; cut funding for research they don’t like; cut funding to anybody who supports a divestment campaign against Israeli apartheid; appointed a blatantly biased Speaker; negotiated draconian copyright laws in TPP talks; secretively courted supposedly independent commentators at parties; intimidated the ABC for reporting allegations against them; cut funding for ABC, SBS, and community radio (and launched a further ‘efficiency study’ into the ABC by a former head of Seven); put right-wing ideologues in charge of public broadcaster appointments; banned Community Legal Centres from advocating policy changes; cut legal aid for Indigenous Australians, asylum seekers, and environmentalists (as demanded by the mining lobby); cancelled all funding to international NGOs; defunded artists who refused sponsorship from a company owning refugee detention centres; defunded the Refugee Council because of its advocacy; forbidden public servants to criticise the government online; demanded a refugee activist remove from their Facebook page a photo of protesters blockading a bus transferring asylum seekers; removed the tax-exempt status of environment groups; replaced secular social workers with chaplains in schools; and established a national curriculum inquiry by two ideologues advocating right-wing propaganda be taught in schools. They are investigating trade unions (a rare voice opposing the present economic system) while ignoring corruption in more powerful institutions; they will reinstate a commission with draconian powers to investigate building unions; they propose to outlaw environmental boycotts; they’ve backed Queensland laws banning G20 protests; and their state-level colleagues are passing draconian anti-protest laws designed to silence political opponents.

They promised transparent government. In reality, they have attempted to shut down the flow of information by axing the Climate Commission; renaming coal seam gas to ‘natural gas’; barring Indonesian journalists from a press conference; requiring ministers to seek approval from the PM’s office before giving interviews (with calls frequently going unanswered); refusing FoI requests for incoming government briefs; claiming Abbott was ‘too flat out’ to talk to the media; deleting pre-election speeches from their website; announcing major environment-destroying policies over the Xmas break; defying a Senate order to release the TPP text; taking down a government website on nutrition; refusing to explain its claim that Edward Snowden has endangered Australian lives; allowing the infant formula industry to oversee its own honesty in advertising; misrepresenting a media release as a ‘Treasury analysis’; refusing to release a budget audit (by a leading business lobbyist) during a by-election; blocking Senate scrutiny of new government surveillance powers; criminalizing whistleblowing; and gagging the media on allegations that senior Australian bankers bribed government officials. On ‘Repeal Day’, they removed 10,000 regulations in one fell swoop without time to review the implications of the changes. They’ve admitted they want sport on the front page.

They promised to save the lives of asylum seekers, and not detain children. In reality, they instructed the Navy not to respond to distress calls, leading to a boatful of people drowning at sea. They’ve employed unlicensed guards; threatened to report gay asylum seekers to PNG police; denied facial reconstruction surgery for gunshot wounds; and scrapped an advisory group on asylum seeker health. Several asylum seekers allege their hands were deliberately burned while in a boat being towed back to Indonesia by the Australian Navy. One person has been killed and seventy-seven injured on Manus Island. They have now been detaining children for a year (and pregnant women), separated a newborn baby from his mother, and sent unaccompanied minors to Nauru. They revoked the community detention status of two children and kidnapped them from school, frightening other children at the same school into running away. They’ve attempted to reintroduce temporary visas meaning genuine refugees won’t be permanently settled in Australia, and eventually gave the Immigration Minister discretion to deny permanent residence based on secret conditions with no right of appeal. They try to coerce asylum seekers into ‘voluntarily’ going home, want to send them home if there’s only a 49% chance they’ll be tortured, have sent some back to war-torn Iraq, handed others (after superficially screening them by teleconference) over to Sri Lanka where they are likely to be tortured, and are negotiating to send detainees to Cambodia which is known for human rights abuses. These policies breach the UN refugee convention.

There is considerable overlap between the broken promises on transparency and saving asylum seekers, with Abbott and Scott Morrison denying media access to immigration detention centres, instructing asylum seekers not to talk to visitors, hiding information about boat arrivals (and justifying this by comparing them to a military enemy), fleeing reporters asking questions about the drowning incident, instructing public servants to incorrectly call them ‘illegals’, defying a Senate order to release documents on the issue, stopping media briefings on boats, refusing to place any credence in the burns allegations because Australian naval officers are above suspicion, making false claims about events on Manus Island, and agreeing with PNG to shut down an investigation into human rights abuses there. They denied the existence of an entire boatful of asylum seekers before detaining them at sea for a month then trafficking them to Nauru — and we would never have known about it if the refugees hadn’t contacted the media. Details are now finally beginning to come out at a Human Rights Commission inquiry, where it’s been revealed that the treatment of detainees is ‘torture’, staff call the detainees ‘clients’ to dehumanise them, guards have sexually abused child detainees, medication was confiscated from a 3-year-old epileptic girl, a psychiatrist was told to suppress evidence of detained children showing mental health issues, children are self-harming and attempting suicide, and generally the place is even worse than where the refugees came from. That shouldn’t be surprising because the entire purpose of the policy is to crush their hope.

They promised a foreign policy based on advancing freedom, decency, and poverty reduction rather than just security and economics. In reality, despite one commendable UN resolution on MH17, let’s not forget some of their less humane foreign policy decisions. They have apologised for (in opposition) having rightly criticized Indonesia, Malaysia, and PNG for human rights abuses; refused to help West Papuan activists against Indonesia’s abuses; banned a Malaysian democracy activist from visiting Australia; were slow to advocate for Australians jailed overseas; condoned torture and war crimes in Sri Lanka because otherwise would mean admitting people fleeing the country are legitimate refugees; gave the Sri Lankan government navy patrol boats to block said refugees; sent border protection vessels into Indonesian waters; authorised raids on an East Timor lawyer possessing evidence of Australian spying; opposed a UN resolution for an inquiry into Sri Lankan war crimes; defeated a UN move to ban use of nuclear weapons; raised the possibility of allowing Chinese troops to train in Australia; praised the ‘skill and honour’ of Japanese WW2 soldiers; and claimed Australia’s involvement in WW1 was in ‘a good cause’. They have cut $8 billion from foreign aid and removed poverty reduction from Australia’s foreign policy goals.

They promised to end class war. In reality, their policies are redistributing wealth upwards.

They promised to improve our country by growing its economy, creating a land of opportunity that would allow everyone to get ahead. In reality, the social health of developed countries like Australia is impaired less by poverty than by the economic, social, and political inequalities (not to mention environmental crises) promoted by an unrestrained market. The Liberals aim to remove all restraints from the free market system that tends to entrench these problems.

They promised to protect and create jobs by fighting restrictions on mining, supporting manufacturing industries, and promoting free trade. In reality, unemployment has grown to its highest level in 12 years; they are sacking government employees; they are allowing employers to hire an unlimited number of foreign workers; they dared a company to leave Australia; they are killing the renewable energy industry; and they are sitting back and watching the death of Australian manufacturing, caused partly by the mining boom and free trade which they continue to promote.

They promised to protect workers’ pay and conditions. In reality, they have reduced the wages of aged care and childcare workers and low-paid cleaners, have advised Fair Work Australia to cut penalty rates, will pay Green Army employees half the minimum wage and exempt them from work safety laws, have defunded Ethical Clothing Australia, have proposed to exclude the Northern Territory from labour laws, and are bullying companies (by threatening to withdraw industry subsidies) into cutting wages and blaming the carbon tax for job losses. They are forcing under-30s to wait up to six months before getting the unliveable unemployment benefit, then apply for 40 jobs a month to be eligible for benefits for six months, then repeat the cycle until they get a job. Yet, they are simultaneously cutting programs that would have helped people find work, implying they are trying to drive up demand for jobs so that people will settle for lower wages.

They promised to cut wasteful spending to reduce out-of-control debt and deficit. In reality, Australia’s national debt is smaller than that of most countries, and Hockey’s budget is neoliberalism masquerading as fiscal responsibility: it doesn’t significantly improve the fiscal position, it just transfers wealth from poor individuals to rich corporations. It pays for corporate tax cuts, fossil fuel subsidies, roads, fighter planes, and refurbishing the PM’s house through new taxes and spending cuts that hurt the poor, the unemployed, young people, university students, schools, families, women, domestic violence victims, the sick, the disabled, pensioners, charities, small businesses, emerging and struggling industries, public broadcasters, public servants (thousands of whom lost their jobs), local councils, Indigenous Australians, poorer countries, scientists whose research would advance human knowledge, and the environment which sustains us all. Despite increasing defence spending, it cuts soldiers’ wages by $20,000, and cuts welfare for orphans of soldiers. The only costs for politicians and high-income earners are blatantly tokenistic and temporary.

They promised to not cut education or health funding. In reality, they’ve made massive cuts including the Gonski schools program and National Disability Insurance Scheme. Their budget starves state governments of schools and hospitals funding to force the issue of delegating those responsibilities to them; increases student debt by deregulating university fees and lowers the income threshold for repayment; cuts numerous educational programs (though they somehow found money for more school chaplains, ignoring a contrary High Court decision); introduces co-payments for GP visits, emergency department treatments, diagnostic tests, and prescription drugs; reduces Australia’s contribution to the World Health Organization; cuts preventative health measures (eg. anti-smoking campaigns); and cuts myriad health programs (including for mental health which we’ll probably need more than ever in Abbott’s Australia). And they’ve proposed giving control over GP treatments to private health insurance companies.

They promised to relieve the cost of living for ordinary Australians through tax cuts, no new taxes, and no cuts to pensions. In reality, their tax cuts favour big business (and they’ve watered down Labor’s planned crackdown on multinational tax dodging); they’ve cut a tax break for low-income superannuation; they’ve imposed fees on those who become bankrupt; they’ve scrapped the first home buyers scheme; and their budget introduced several regressive taxes and harsh cuts to welfare. The latter include increasing the retirement age, cutting retiree concessions, cutting various family benefits (illustrating the government’s disregard for unpaid work), suspending welfare payments for parents of truant children, restricting and constantly reviewing access to disability payments while cutting services for disabled people, cutting payments for dementia carers, and a web of technical changes to indexation and eligibility thresholds across all payments. Moreover, they’ve set up a welfare review that is not consulting with community groups, and has canvassed simplifying 75 payments into four and restricting what recipients can spend their money on.

Abbott promised to be a Prime Minister for Aboriginal affairs and spend his first week as PM in an Aboriginal community. In reality, he has gone nowhere near said community, consolidated 150 Indigenous programs into five, paid Indigenous staff in his office less than others doing the same job, and described Australia as ‘unsettled’ before the British arrived.

They promised paid parental leave. In reality, it is nowhere in sight.

They implied by their attacks on Labor that they would not misuse taxpayer money or protect corrupt individuals. In reality, they have been caught claiming expenses for attendance at weddings and suchlike; ministers are now allowed to hold shares in companies; and they’ve redirected funds from one Royal Commission on institutional child sexual abuse to another on home insulation. Abbott, in response to a report exposing the role of his friend Cardinal George Pell in covering up Catholic child rape, falsely claimed Pell was the first senior cleric to take the issue seriously.

They promised hope, reward, and opportunity. In reality, ‘opportunity’ was code for ‘if you’re unlucky you’re on your own’, ‘reward’ meant ‘we’ll feather your nest if you’re already doing well’, and ‘hope’ meant ‘dream on’.

They promised to govern competently. In reality, when occasionally diverted from their script by an intelligent questioner, their ministers reveal a laughable ignorance about even their own policies.

To add insult to injury, Abbott promised to be trustworthy and not talk down to voters but in reality has treated us with thinly disguised contempt. In opposition they blatantly misled us about their intentions, repeatedly assuring us there would be no surprises and no broken promises. Then in government they blindsided us with extreme right-wing policies, breaking too many promises to count. They have arrogantly insisted that they are the adults (particularly disturbing when you recall Abbott endorses smacking naughty children), and expect us all to support their government and everything it does because it represents ‘Team Australia’. They have taken our votes for granted, refusing to even acknowledge that 100,000 Australians marched against their government, and that Western Australia resoundingly rebuked them at a by-election. They have demanded the Senate rubber-stamp policies opposed by the majority of Australians. They feed us a never-ending stream of blatant lies and assume we are too stupid to notice.

Abbott is evidently following the Institute of Public Affairs’ blueprint to transform Australia in three years, like a right-wing Whitlam. Some educated guesses at what’s coming soon: abolition or sabotaging of the Renewable Energy Target; more cuts to the ABC; more welfare cuts; more regressive taxes, such as an increased Goods and Services Tax; more tax cuts and loopholes for the rich; more cuts to corporate regulations and the public service; more restrictions on workers’ rights; abolition of penalty rates; privatisation of public assets; school curricula promoting right-wing beliefs; delegation of more federal responsibilities to the states where Christian fundamentalists and other right-wing ideologues can push their agenda under the radar; and the implementation of as many IPA policies as possible.

When the next election rolls around, Abbott will do whatever it takes to try to lure us into voting him back in — but I reckon it won’t fool anyone. Abbott has shaken Australians out of our apathy; we have woken up to the fact that politicians are not acting in our interests. The rise of the internet means Australia can no longer be governed through the mushroom treatment, because we can all remind each other about the government’s litany of lies and bad behaviour.

The Abbott government represents an extreme version of the neoliberalism that has dominated politics for three decades, an ideology that when put into practice has been described as ‘totalitarian capitalism’. Its rhetoric about ‘individual freedom and free enterprise’ is acted on only when convenient to its true obsession — rewarding the ‘good people’ at the top of society and punishing the ‘bad people’ at the bottom. For all their talk about ‘progress’, they want to drag us back to the 19th century, before the welfare state.

If you’ve been reading this article and congratulating yourself that Abbott has yet to hurt or take rights away from you, how many more groups does he have to attack before you speak out against his government?

If you’ve been reading and nodding along, don’t just sit on your hands. Why not come along to your local March in August this weekend? Let’s show Abbott we know what he and his colleagues are up to, and we won’t stand for it.

Image source

Editor’s Note: Every claim made by James Wight in this piece is backed by reference to news sites and reports. So well researched is James’ original piece that a single paragraph could contain twenty links.

The editors at TPS removed all of those links but only for ease of reading. If anyone wishes to see all the links, James has kindly posted the unedited version with all links on his own blog at

Whose freedom?

Many years ago, I think during the Reagan years, the US was on one of its regular attacks on China’s human rights record and the lack of freedom for its citizens, and I recall someone from the Chinese side replying to the effect that Chinese citizens could walk their city streets at night without fear. That response raises important questions about how we view freedom.

What is this nebulous thing that is freedom? (Note that ‘freedom’ and ‘liberty’ are generally interchangeable, partly because some languages, such as German and French, have only the one word for the concept while English uses both.)

The philosophers argue that there is a logical difference between freedom and matters such as justice, equality and morality but generally concede that these play a part in our perception of freedom.

A basic definition of freedom, that is still used, is that of John Stuart Mill who wrote in On Liberty in 1859:

The only freedom which deserves the name is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to attain it.

There have been two basic approaches to freedom:

  • One, that freedom comes from being rational and making one’s own choices on that basis, which includes the rational decision not to harm others by one’s actions. The ultimate (utopian) outcome is a society that does not require rules because everyone behaves in a rational manner — the perfect form of anarchy, not that any of the mainstream philosophers actually recommended anarchy.
  • The other, that freedom occurs when one is free from coercion and interference, that one is not forced to undertake activities or make choices over which one does not have some control.
In 1958 Isaiah Berlin called these ‘positive’ (meaning ‘freedom for’) and ‘negative’ (meaning ‘freedom from’) concepts of freedom. The ‘positive’ concept comes from a long tradition going back to the ascetics and was popular after the Enlightenment, arguing that a rational approach gave an individual the ability to determine which desires are ‘true’ (should be pursued) and which ‘false’ (should be ignored), which was seen as essential to genuine freedom.

The problem, even for those early proponents of the rationalist view, was that not everyone may have achieved the level of rational thought necessary to achieve that degree of freedom. For Isaiah Berlin, that gave rise to the totalitarianism of both the Right and Left (remembering he was writing only a decade after WWII and during the Cold War) because someone other than the individual could decide what was required to achieve freedom and impose on others their view of freedom and of what was necessary to achieve that higher level of rational thought.

Another criticism is that, like religious ascetics, one can achieve this personal freedom by reducing or eliminating desires and wants. In this situation, the person no longer desires to take any action that may run up against constraints, so it can be said that all actions they do desire to take are ‘free’. This can, however, lead to the acceptance of situations that are inherently not free — for example, a well-treated slave being content with their lot.

The slave analogy was also used to criticise the ‘negative’ concept because it is possible that a slave may be allowed to live a normal day-to-day existence without coercion or interference but still remain a slave. Under the definition, that is ‘freedom’ but it ignores that the slave is still liable to renewed demands (interference) from their master.

That has led to many attempts at refinement of the definition of freedom. This has meant such approaches as identifying those areas where we should expect to be free to make our own decisions: this is our emphasis on so-called ‘inherent’ human rights, such as freedom of expression, freedom of association, freedom from arbitrary arrest, freedom in our personal/private lives and so on. To make it easier, we often break it down into those component parts, so, rather than talking about freedom as a whole, we argue about the specifics of each of those freedoms. There has been, and is, much debate about what should be included.

In January 1941, Franklin D Roosevelt spoke of four freedoms: freedom of speech, freedom of worship, freedom from want and freedom from fear. He spoke in the context of the war that was then raging in Europe, and in terms of a new world order following the war, but the underlying aspects of those freedoms remain relevant, particularly the latter two which are not commonly picked up in the current liberal views of freedom.

Attempts to define freedom also led to consideration of the nature of the constraints that are imposed. At different times, words like ‘intentional’, or ‘offensively’ have been added to the definition of what limits one’s freedom: that is, the act that limits your freedom must be intentional and not merely an accident, or in some manner be offensive rather than defensive, to count as a genuine constraint. An element of ‘domination’ has also been considered: that covers the slave ‘problem’ in the sense that even if a slave is allowed to act in a free manner by their master the slave is still subject to ‘domination’. This, however, can also be answered by the earlier approaches to freedom, on the basis that a rational human being would not choose to be a slave and therefore runs counter to Mill’s condition that freedom includes not impinging on the freedom of choice of others.

The difficulty is matching the philosophic logic to the reality of society. Even the philosophers recognised that some rules were required, that we could not each be left to pursue our own ends without some constraints that protected the rights and freedom of others. This is the ‘social contract’ that became necessary when humans began living in societies rather than small or extended-family groups of hunter-gatherers. In the larger groups we gave up some of our freedom for the benefits, including the security, that society conferred. And when our societies became democracies, we were said to be free because people gained an active role in their own government or, in other words, became involved in determining the authority that was exercised over them, rather than being subject to the arbitrary will of a monarch.

The two shapes of freedom actually overlap to a considerable extent (as you may have guessed from what has already been said) but also give rise to the different political approaches of the Right and Left.

The Left emphasises the ‘positive’ freedom in its approach, considering that an individual cannot achieve freedom, or the higher level of their rational being, if they are poor, uneducated, condemned to no choice but physical labour, are part of a persecuted minority, and so on. Or, as some have said, freedom is meaningless to someone who is starving or has no home, although by the technical definition they may well be ‘free’. That gives rise to the Left and progressive view that physical and social conditions are also determinants of freedom and need to be addressed. In this view, removing constraints to freedom includes improving the individual’s capacity to exercise his or her freedom.

The Right, the neo-liberals (libertarians) and the economic rationalists, are more concerned about ‘negative’ freedom, the reduction of constraints, particularly by government, to individual decisions. They place a high priority on property rights, both physical and intellectual, (which was included by some early philosophers) as a way to maintain freedom, and include in that the capacity of labourers to ‘own’ and trade their labour. But this ignores the history of how many property rights were acquired: the landless peasants of South America, for example, had their land stolen and, if freedom means defending property rights, whose rights should prevail, those of the peasants or the current landholders? That is not an issue the Right likes to address.

G A Cohen, a Marxist political philosopher, also argued that lack of money is a constraint to freedom and attacked the logic of the Right’s view, describing it in this way:

Freedom is compromised by interference, but not by lack of means.
To lack money is not to suffer interference, but lack of means.
So poverty does not carry with it lack of freedom.
The primary task of government is to protect freedom.
So, relief of poverty is not part of the primary task of government.

C B Macpherson, a trained economist and also a political philosopher, developed an argument in the 1960s that early philosophers on freedom, like Hobbes and Locke, were bound by the values of their time and so developed their concept of freedom around the market, contractual obligations and property: the concept that an individual is the sole proprietor of his or her skills and owes nothing to society for them — what Macpherson called ‘possessive individualism’. Macpherson was criticised by both Right and Left. He also engaged in a debate with Milton Friedman. While Friedman claimed that history showed ‘that capitalism is a necessary condition for political freedom’, Macpherson countered that Friedman’s own examples showed ‘that political freedom actually came first and that those who gained that freedom, the property-owning elites, used it in their own best interests’, opening the doors to unrestrained capitalism.

Marx’s view of alienation relates to the disconnect between labour and its product. In Britain, it arose following the enclosures, whereby the peasants lost their access to the commons. Despite a considerable lack of freedom in feudal times, the serfs had access to land to provide for themselves and it has been estimated that they were able to retain anything from 50% to 70% of the product of their own labour. The loss of access to land meant that they had only their labour to sell, even to obtain the basic necessities of life. In essence, one form of a lack of freedom was exchanged for another. If I have no choice other than to sell my labour to survive, is that freedom?

In Nazi Germany, an Aryan German citizen could be quite happy and free as long as he or she was willing to accept the pogroms against the Jews, the attacks on the communists, and the denigration and persecution of other minorities, including non-Germanic foreigners. Was that a rational decision? Was it just acceptance of the views of the majority? Or was it manipulated by propaganda? They are questions vital to our sense of freedom.

It also brings us to a very murky area regarding our own society: the role of advertising, government manipulation of popular opinion, and even, as we saw in the lead up to the 2013 election, manipulation by the media. Brainwashing is definitely recognised by the philosophers as being counter to freedom even though the brainwashed person apparently ‘freely’ makes his or her own decision. Advertising and other manipulations may not be brainwashing per se but, to my mind, they are sailing very close, particularly as psychologists provide the manipulators with more and more knowledge about how we, as humans, make our decisions and choices. (I read recently that there are more psychologists employed in advertising in the US than are employed by hospitals.)

Kovie Biakolo, a young American woman who has her own blog, made some perceptive comments about freedom (or lack of it) in this modern context:

I believe that our society enslaves us in many ways. In the first place, consider how we work and why we work and how we are taught to work. … The premise is to pay bills and to buy things, many of which we are convinced to want in the first place. We become enslaved to our organizational practices and to our careers and, of course, to the almighty dollar. … Beyond our financial enslavement, think of the messages we consume everyday. We are told what is beautiful, what is politically popular to ascribe to, and the type of person we ought to want to be.

That raises an issue related to personal freedom and also to the concept of the rational being: that is our view of ourselves, our identity (or identities), and our autonomy in relation to that. It is accepted that many of our identities are socially constructed but we exercise our autonomy by deciding whether or not we accept a particular identity and exercise our freedom in deciding how we authenticate that identity socially. Thus I am a brother, a husband, a grandfather, identities over which I had (and have) no, or little, choice and which have social expectations attached to them but I do, or should, have some freedom to decide how I fulfil those identities. Other identities I may choose, including things like my political character and again I should be free to choose how I express that (writing for TPS for example). Freedom, then, can also be reduced if the choices to express identity are limited, whether by government or social constraints (majority values) — this is one place where issues like gay rights fit into the debate on freedom.

In my pieces earlier this year, ‘Whither the Left’, I raised the issue of the new working class, the university educated whose knowledge and intellect has now also become a commodity, just as labour did, to be sold in the market. Does this change the nature of the debate about the rational person being free? Once education was seen as a means to improve freedom by enhancing understanding and rational thought but if education now merely creates another commodity to be sold, where does freedom lie?

Jeff Sparrow recently addressed some aspects of freedom in a piece regarding comments by the Human Rights Commissioner, Tim Wilson. He concluded with a major issue for the Left and progressives:

… the Left does need to think about freedom. It’s symptomatic of our marginalisation that [the term is] increasingly deployed by conservatives rather than progressives. There’s an urgent need to reclaim freedom, to rearticulate the concept as a synonym for liberation rather than exchange.

What can progressives do to give ‘positive’ freedom a positive image?

What can progressives do to show that freedom is about more than free markets?

How can we put freedom back on the political agenda in a country that already thinks it is free?

What do you think?

What is the Hockey budget all about?

Does anyone out there know? Does Hockey know? Does Cormann? Does Abbott know? Do his Cabinet and his backbench know? The commentators and the voters have their ideas, but do they really know what is behind the Hockey Budget?

Readers will not find a definitive answer here; I don’t know more than anyone else. Rather this piece presents some plausible reasons why Hockey would bring down such a budget. I will leave it to you, the reader, to reach a conclusion, and if you are so inclined to make your suggestions in the comments section.

There is a surprising consensus among political commentators, economists, the Federal Treasury and the people about the effects of the budget, namely that it disproportionately penalises the middle and lower income earners. Proportionately, the wealthy are penalised less. Why is this so? What ideological position finds this acceptable? What economic argument supports this approach?

A superficial answer to the question: ‘Why would Hockey bring down such a budget?’ — the answer the government has used from the outset — is that there is a ‘budget emergency’, that the nation’s finances are ‘in crisis’, a ‘debt crisis’, and therefore radical corrective measures are needed, and now. Yet from the outset this was seen as the charade it is by economists and all but the most sycophantic Coalition commentators. There is no crisis, no emergency demanding immediate and drastic action.

Politicians, economists and journalists alike do agree though that structural defects exist in the budget that have their origins with several previous governments, defects that need correction to enable the delivery of the services that Australians want to be continued into the decades ahead: universal health care for an ageing population, disability care, a good education for all, jobs for all who can work, and infrastructure to support our growing population. Almost universally, the same people agree that corrections need to occur over the years ahead. While some agree that the corrections might usefully be commenced now, the majority does not see that they need to be corrected urgently, in a single budget, and certainly not by draconian measures.

The ‘crisis’, the ‘emergency’, was no more than a political strategy devised by the Coalition to soften up the electorate for the punitive budget it intended to bring down. There was no emergency or crisis, but the strategy served to preemptively answer the question the people were bound to ask: ‘Why would Hockey bring down such a destructive budget’? The Coalition hoped the answer would be obvious.

For the history of the so-called crisis, re-read the excellent piece by 2353 Debt crisis: what debt crisis?

If any reader still needs convincing that the ‘emergency’, the ‘crisis’ was fictitious, read Hockey’s own words, uttered in a radio interview during his July visit to New Zealand: ‘…there is no crisis in the Australian economy, nor is it in trouble.’ He made no mention of a ‘budget emergency’.

Even Tony Shepherd, the hand picked chair of Abbott’s pre-budget Commission of Audit, whose task it was to find budget savings, said there was no budget emergency. Most economists agreed.

So let’s look for what might be behind Hockey’s budget. What would motivate him to bring in such a punitive one?

The possibilities canvassed here are:
1. The budget reflects the Coalition’s political ideology.
2. The budget reflects an economic position.
3. The budget reflects a political intent to reorient the social order.

Proposition 1: The budget reflects the Coalition’s political ideology
The Liberal Party website mirrors its ideology in the statements of beliefs in its Federal Platform. Among the many laudable beliefs listed there, the following are relevant to this discussion:

We believe:

‒ In the innate worth of the individual, in the right to be independent, to own property and to achieve, and in the need to encourage initiative and personal responsibility.

‒ In the creation of wealth, and in competitive enterprise, consumer choice and reward for effort as the proven means of providing prosperity for all Australians.

‒ In the principle of mutual obligation, whereby those in receipt of government benefits make some form of contribution to the community in return, where this is appropriate.

In the section on the economy, we read:
Liberals want an economy that provides quality jobs and high living standards across the nation. Achieving these goals in a competitive global marketplace means we must have on-going economic reform.

Liberals believe the best strategy for jobs and prosperity includes:

‒ giving priority to sound economic fundamentals, including responsible fiscal management, low inflation, low interest rates, rising employment levels, low net debt and high real business investment;

‒ supporting the role of small business
‒ encouraging workplace reform…

Note the words: ‘we must have on-going economic reform’ and ‘workplace reform’.

So is the budget a reflection of those beliefs and preferred strategies? Possibly, but the extreme nature of the budget hardly reflects these benignly stated beliefs.

To get a deeper understanding of Liberal ideology, take a look at the wish list of the extreme right wing think tank, the Institute of Public Affairs, which has an acknowledged and profound influence on Coalition thinking.

It is not afraid to state its views brazenly; it does not sugar-coat them as does the Liberal Party platform.

Among the first seventy-five wishes the IPA published are the following:

‒ Eliminate family tax benefits
‒ Legislate a cap on government spending and tax as a percentage of GDP

‒ Legislate a balanced budget amendment which strictly limits the size of budget deficits and the period the federal government can be in deficit

‒ Allow individuals and employers to negotiate directly terms of employment that suit them.

That comes closer to explaining Hockey’s harsh budget. The IPA loathes government spending and taxes, adores a balanced budget, hates deficits, despises the ‘nanny state’, and advocates economic and industrial relations reforms, born of its fervent advocacy of free markets, minimal government oversight and regulation, and industrial relations that favour the employer.

If you have any doubt about the influence the IPA has on the Abbott government, read the article in Crikey, which reported that the IPA has added another 25 items to its wish list, and that almost half of them are on Abbott’s agenda.

Abbott himself said at an IPA function: ‘So ladies and gentlemen that is a big “yes” to many of the 75 specific policies you urged upon me.’

Crikey reported that in a Sunday Age article last year, John Howard acknowledged the influence of the IPA: ‘…the IPA is a Trojan Horse for scorched earth neoliberals trying to “condition the public attitude on these [policy] matters.”’

It is reasonable to conclude that although the Liberal Party platform reads benignly enough, innocently enough to allay fears about its intent, the Coalition is really following the radical neoliberal free-market ideology of the IPA.

The IPA advocates lower taxes, especially for the wealthy. It wants a return of income taxing powers to the states. The preferential treatment given high-income earners in the budget, and the penalties imposed on the less well off, are consistent with IPA wishes. The Treasury analysis of the budget released early in August starkly revealed the extent of the imbalance between the treatment of the wealthy and the less well off.

It showed that the combined effect of the budget’s saving cuts which disproportionately penalised the lower income earners, and the changes in tax that benefit the wealthy more than the poor, is that ‘an average low income family loses $844 per year in disposable income (earnings after tax and government payments) due to the budget. Middle-income earners forgo $492; while a high income family is down by $517.’

Hockey’s angry response to this revelation in Fairfax Media was: ‘That story is wrong because it fails to take into account a range of things like the fact that higher income households pay half their income in tax, low income households pay virtually no tax’. He went onto say that each wealthy taxpayer pays for the benefits enjoyed by four on welfare — his ‘lifters’ supporting the ‘leaners’. In other words, he is saying that the progressive tax system that this nation has had in place for many years is unfair to the wealthy. Clearly he is opposed to progressive taxation, at least to what we have in Australia. Moreover, are his assertions correct? Do high-income earners pay 50% tax? No. For the current financial year, it is only when taxable income exceeds $180,000 that the taxpayer pays the maximum of 45c for each additional dollar over that figure. The ‘effective tax rate’ for such people is 30 to 45% depending on how much above $180,000 the total taxable income is. So Hockey is exaggerating and is therefore misleading, a misdemeanor for which he chides his own Treasury. Remember that these Treasury figures about the effects of the annual budget on taxpayers are the ones usually revealed in the budget papers, but not this year. With the assistance of ‘Freedom of Information’, we now know why.

In an online survey accompanying the Fairfax article, people were asked: ‘Does Joe Hockey's budget hit the poorest the hardest?’ The options were: ‘Yes’, ‘Yes, but that is fair because they pay less tax’, ‘No’, and ‘Not sure’. 90% answered ‘Yes’. The other figures were 4%, 3%, and 3%. Even allowing for the unreliability of online polls, this result is hardly equivocal; the people (17,292 of them) had made up their minds. Only 3 and 4% thought the budget was fair.

It is reasonable to conclude that political ideology is behind the Hockey budget, an ideology shared by Abbott, Cormann and most of Abbott’s Party Room, and that the more strident version of it, the IPA version, is the real ideology rather than the party platform so soothingly replete with motherhood statements. They seem unaware that the people do not approve of the budgetary manifestation of their ideology, if the above online poll and other polling feedback is any indication.

Proposition 2: The budget reflects an economic position

This follows from the Coalition’s ideological position. It favours free-markets, private enterprise, light government regulation, industrial relations that favour the employer as grossly exhibited in WorkChoices, low taxes for the wealthy, and ‘mutual responsibility’ for those receiving benefits, crudely captured in the words: ‘dole bludgers’ must work for the dole, should be forced back to work, should receive no support for six months, and, more recently, must apply for forty jobs a month. The ‘lifters’, those hard workers who have been doing so much laborious heavy lifting for so long, can no longer support the ‘leaners’, the bludgers who sit around all day watching TV and boozing their welfare money.

What is Hockey’s preferred economic model? We don’t know. We hope he has given it serious thought.

From what we can see, he is not Keynesian. He opposed the second and larger tranche of the stimulus during the GFC, all the time lambasting expenditure on the Home Insulation Program, which the Coalition classed as a catastrophic disaster that killed people and burned down houses, as well as roundly criticizing the Building the Education Revolution Program, which was labeled as a grossly mismanaged, overly expensive and an unnecessary exercise. Clearly Hockey would not have used such stimulatory measures.

If you asked him whose economic model he prefers, which would he chose? Is he a follower of the Chicago School of Economics, a neoclassical school of economic thought that rejected Keynesianism, (which favours higher government spending in a recession to help the economy recover quicker, rather than waiting for markets), in favour of Milton Friedman’s ‘monetarism’, (which emphasises the importance of controlling the money supply to control inflation). Monetarists criticize expansionary fiscal policy arguing that it will cause inflation and therefore will not help. Does Hockey subscribe to the thinking of Friedrich Hayek from the Austrian school, who advised Margaret Thatcher, and later joined the Chicago school? His seminal book, The Road to Serfdom, became widely popular among those advocating individualism and classical liberalism, a position close to Hockey’s.

Does Hockey subscribe to the trickle-down theory of economics that proposes that supporting the wealthy with tax breaks and incentives will create jobs and grow the economy, the benefits trickling down to those at the bottom of the pile? If so, does he realise that ‘trickle down’ has been debunked by hard data that shows that it increases inequality? The poor get richer along with the wealthy, but at a slower rate, so that the gap widens. John Quiggin has shown this in his book Zombie Economics: How dead ideas still walk among us (Princeton University Press, 2010), described in the TPS piece Joe Hockey should read about John Quiggin’s Zombie Economics.

Ronald Reagan and his economics adviser David Stockman were ‘trickle down’ believers. Renowned economist John Kenneth Galbraith rejected it, noting that ‘trickle-down economics’ had been tried unsuccessfully in the United States in the 1890s under the name ‘horse and sparrow theory’: 'If you feed the horse enough oats, some will pass through to the road for the sparrows’.

There is ample evidence that inequality results in discord, civil dispute, and when gross, revolution. Nobel Laureate Joseph Stiglitz has documented this in The Price of Inequality, reviewed in the TPS piece Focus on political ideology: Joseph Stiglitz More recently, Thomas Piketty, in Capital in the Twenty First Century traced the path of inequality as far back as the eighteenth century, proposed that it results from the growth of income from capital exceeding the rate of economic growth, and described its adverse effects.

Does Hockey think inequality, increasing inequality, is acceptable in this country?

Already in Australia we are seeing the harmful social effects of a budget that is bound to increase inequality, one judged by a large majority of the people as simply unfair.

So what is Hockey’s preferred economic model? Does he have one? Does he know what it is? We can judge only from his actions, and they point inexorably to a belief in trickle down economics. We seem to be headed for another version of Reaganomics, this time Hockeynomics. That is what his budget advances: more inequality and more unfairness, unless his extreme budget can be stopped in its tracks.

Proposition 3: The budget reflects a political intent to reorient the social order

This is a plausible proposition. We know how vindictive Abbott is. We know how he delights in punishing his enemies. In the piece, Say no, no, no to Tony Abbott , it was predicted that if elected he would be vengeful and weak. We have now seen both attributes on display. His vengefulness has been exposed in his Royal Commissions into the HIP and unions, and more recently the Bill Scales inquiry into the NBN. He is determined to pillory his political enemies. Is this budget another act of vengeance against his traditional enemies — the workers, those on lower incomes, those on welfare? It looks like it.

Abbott operates in George Lakoff’s ‘Strict Father’ mode, as it seems does Hockey and Cormann too. Even when Hockey seems reluctant to do so, he goes along with Abbott — his future depends on it!

Take a glance at the TPS piece about Lakoff’s book Moral Politics: How Liberals and Conservatives Think titled The myth of political sameness to check the words used habitually by those who use the Strict Father model of political morality: ‘discipline, tough it out, get tough, tough love, strong, self-reliance, individual responsibility, authority, competition, earn, hard work, enterprise, property rights, reward, freedom, punishment’, and so on. Recognise this language?

Look at the Hockey budget and ask yourself if it is an act of vengeance, an act of retribution against those who are not traditional Coalition voters: the workers, the less well off, those on welfare; and a leg up for those who are: the wealthy, the elite, the business people. It looks that way.

It looks like this Hockey budget accomplishes the Abbott agenda of hurting those he despises, those who don’t support him, those who are not in his camp. Is this at least part of the answer to ‘What is the Hockey budget all about?’

Where does all that leave us?

I don’t know. I don’t know why Hockey brought down the budget he did, and why he continues to defend it so strongly despite opposition from much of the Senate, disapproval among commentators and economists, and dismay in much of the electorate? We can only surmise.

Does Hockey himself know why he has produced such a budget?

Is it partly because of his Liberal political ideology, one influenced by the extreme neoliberal position of the IPA? Is it partly influenced by his preferred model of economic thought, perhaps the views of Friedman, Hayek or the proponents of trickle down economics? Is he familiar with these economic models? Has he studied them closely? If so, has he reached a rational conclusion about the most appropriate for this nation at this moment in time? Or is he wedded to one no matter what the nation’s economic situation, like so many mainstream economists?

We hope he has studied economics. We hope he knows about and understands the various models that exist. We hope he has selected one rationally after careful consideration. We hope his actions are not ad hoc, carelessly adopted to match his political position, or his prime minister’s agenda.

Is Hockey’s budget partly the result of the intent to reorient the political order to one more in tune with his and Abbott’s political philosophy? Where everyone works hard for whatever wage is available? Where those who don’t, the bludgers, the leaners, are punished, forced into work or suffer the consequences of their reluctance, their resistance? Where those who provide employment, the lifters, are held in high regard, and supported with tax breaks and enticements?

I don’t know the answers to the questions I pose. I can only surmise, only hypothesise. But I suspect that all these propositions are valid, and operate in varying degrees.

I do hope, perhaps vainly, that Joe Hockey — not your ordinary Joe — has thought deeply about what his budget is all about, that he has arrived at his budget conclusions after searching his mind and his soul about what his budget is intended to achieve, why this is so, and whether his fashioning of it is likely to achieve its purpose.

I hope too that he has reflected deeply on his budget’s fairness, and whether it is consistent with what the majority of the electorate appears to want for this nation, an egalitarian society where the ‘fair go’ reigns supreme, where opportunity is available to all, where harmony pervades and unites our people.

What do you think Hockey’s budget is all about?

Debt crisis — what debt crisis?

Let’s face it; the Australian public has been bashed around the ears for years by the LNP about the level of government debt. Some economists would contend that Australia doesn’t have any debt — and certainly not a debt problem.

Unfortunately, this piece has to contain some history and economics to illustrate the point.

Australia started issuing currency in its own name in 1910: previously each bank issued its own currency (banknotes). In general, banknotes had a promise to pay the denomination in gold coins at a fixed rate should the bearer deliver the note to the issuing banking institution. The first ‘Australian’ currency was the private bank issued banknotes overprinted with ‘Australian Note’, followed in 1913 by the first government issued ten shilling note. Other denominations soon followed. Australian Government notes could be converted into gold coins at the head office of the ‘Commonwealth Treasury’ — the government body responsible for issuing the notes. Effectively, early banknotes in Australia and around the world were freely convertible for gold.

Countries also operated on a similar basis. An agreement between a number of countries in the early 1900’s (as represented by the USA’s Gold Standard Act) meant that gold was the world currency and that countries had to have sufficient gold in their reserves to ensure prompt payment should every banknote holder decide at the one time to convert their banknotes to gold. While a number of countries banned the holding of gold by their citizens during the period between World War 1 and World War 2, the Breton-Woods Agreement reinforced the ‘gold standard’ between countries from the conclusion of World War 2.

The Breton Woods Agreement meant that signatory countries could convert their gold to US currency at a rate of USD35 per ounce of gold, and the exchange rates between signatory countries’ currencies were fixed in advance. While countries could change the exchange rate between their own and other currencies, changes were infrequent and certainly were not quoted in the media on a daily basis. President Nixon removed the USD35 per ounce trading in gold in 1971.

Following the repeal of ‘the gold standard’ by the US, Australia fixed its currency to the Trade Weighted Index, prior to Hawke and Keating ‘floating’ the currency in 1983. Greg Jericho does a much better job than I can of explaining the whys and wherefores of fixed versus floating currencies here.

Now the history is over, we’ll start the economics. Economists will tell you that all the actions you take today will be made with an economic intent. Should you choose to purchase some milk, the rationale is that the milk is available at a price you consider to be reasonable for your purposes — whether it be to make your coffee taste better or to give nourishment to a child. You will purchase the milk knowing that your $1 per litre could be put to other purposes, say a few apples, but the ‘need’ for the apples does not rate as highly as your ‘need’ for milk.

For the milk to get to your refrigerator, there are a number of economic decisions made: including the farmer raising cows rather than say sheep; the processor deciding to purchase raw milk from the farmer; and the supermarket choosing to purchase milk from the processor. The entire production chain relies on people making a ‘rational’ (and this word is important later) decision that the milk production, retailing and consumption is the best possible use for the money expended in the exercise of getting milk into a cup of coffee.

Economists will tell you that ‘the market’ has full knowledge and is always rational. To an extent it is. If Australians suddenly developed a love of the coffee creamer powders so loved by those on the other side of the Pacific, it stands to reason that there would be a lessening demand for milk — meaning that the farmer would lower his price in an attempt to supply the same amount to the processor. If, on the other hand, in 2015 Australia sold twice as much powdered milk to the US to make additional coffee creamer than we did in 2014, the demand for raw milk would increase, ensuring our farmer better prices for his product.

So how does a discussion on banknotes and coffee creamer relate to Australia’s debt level? Glad you asked – here we go.

Under the gold standard banks needed to have sufficient reserves of gold to pay out anyone that presented a banknote to them in exchange. This process finished prior to World War 2. People still trusted banknotes after the abolition of the ability to hold a private stock of gold, even though the banknote (and coins) used as legal tender were only backed by a government promise rather than a token of some real value. There was a rational belief that sufficient reserves were available to exchange the tokens (banknotes) for intrinsic value at a rate set by the government of the day — even though it was probably illegal to have the intrinsic value in your possession. To this day, we all have sufficient trust in the economic system to accept that the $50 note we receive from the ATM will be accepted by the shop to buy the milk and, as milk costs $1 a litre, we will get some other readily acceptable tokens of value back to make up the difference between the value of the milk and the $50 note (token) we gave the shop. This system is known as fiat money.

Definition: Fiat money is money that is intrinsically useless; is used only as a medium of exchange.

In 2011, the Reserve Bank requested the scrapping of the 5 cent coin, as it cost more than 5 cents to make the coin. It stands to reason that it costs considerably less than the face value to make the rest of our currency tokens.

We still have a rational belief that the currency we use has a value, even though the tokens — plastic banknotes or metal coins — are clearly not worth the face value attached to them and there is no implied promise of backing by intrinsic value.

There is a worldwide demand for currency to pay for imports and exports — and some currencies have greater acceptance for this purpose. In essence, there is also a supply and demand for currency, similar to the discussion on milk prices above. Where there is a market for a commodity, there are also people who will speculate on the ongoing supply and demand of the item. So in addition to the use of a currency for the payment of goods and services, there is also a speculation market for currency, just as there used to be for pork bellies, an indicator of pork production — apparently! Both systems rely on trust and a rational belief that the currency they purchase today will have a value tomorrow — of course, the speculator hopes the value is higher!

Australia has a Council of Financial Regulators (more detail here) that:

… is a non-statutory body whose role is to contribute to the efficiency and effectiveness of financial regulation and to promote stability of the Australian financial system.

Effectively it monitors the health of Australia’s financial system; there is no overarching reference to an external value base or agreement as there was until the 1980’s.

Following conventional economic theory, the value of the Australian Dollar since 1983 has not been tied to the value of a gold brick but whatever the market decides is the correct price at the time of the transaction. In effect, while the Reserve Bank does buy and sell currency in foreign markets to ‘manage the currency’, it is not the final arbitrator of the value of the dollar in relation to other currencies.

The US Federal Reserve and the Bank of England have been using a policy of ‘quantitative easing’ to generate some life into their respective economies for the past few years, following the GFC (‘Global Financial Crisis’) of 2008. The US Federal Reserve has at times effectively printed USD40 Billion per month, after trying a number of more ‘conventional’ strategies such as reducing interest rates (which failed to achieve the desired results) in order to generate spending in the community.

L. Randall Wray is a Professor of Economics at the University of Missouri, Kansas City, and Senior Scholar at the Levy Economics Institute of Bard College, New York. His full biography is here. He writes a blog Great Leap Forward and explains a concept called Modern Monetary Theory here. Very briefly, the theory suggests that while most will pay taxes to the Government and rely on others to provide them with a source of income (salary, wages, welfare, dividends and so on), Governments are the source of money and can clearly manage the supply and demand for money to suit their own purposes. Bill Mitchell, the Professor of Economics at Charles Darwin University has a blog site where he frequently writes about Modern Monetary Theory and argues that poor economic choices, such as austerity (frequently used as an economic tool to ‘pay back debt’), contribute to social problems.

While countries as far back as Germany, in the period between the World Wars, and more recently Zimbabwe and Japan, have attempted to print their way out of economic recession and failed, the US and UK have maintained the confidence of the financial markets. They are issuing the money by way of issuing securities to financial intermediaries and claiming they are producing assets, not currency. The financial intermediaries then profit from the interest paid by the government ‘borrower’. It is worth mentioning here that while the UK and USA were printing money and remaining ‘solvent’, the so-called ‘PIGS’ of Europe (Portugal, Ireland, Greece and Spain) didn’t have the option as they use the European Community currency known as the Euro. It was impossible for the “PIGS’ to print their way out of trouble as they couldn’t manufacture the underlying ‘security’ as well as control the issue of the currency — Euros are not country specific.

Rudd’s $900 cheques issued to a majority of Australians during 2008/9 was another method of ensuring there was a significant input of money into the economy. It really doesn’t matter how much of the money was used for ‘useful’ endeavour or spent at the TAB, the spending of the money keeps people employed, and they then go and spend money and so on.

John Kelly, writing on the Australian Independent Media Network website claims there is a Ridiculous Debt and Deficit Scam where 90% of us pay to benefit the remaining 10%. Basically we all pay taxes which go to the government — the government then pays interest on debt over securities it created and borrowed against in the first place in the commercial money market. The lenders in the commercial money market include those same financial institutions that collectively report billions in profit each year.

So while most of us have three options to ensure we have sufficient income to pay our debts — receive a higher income, reduce expenditure or win the lottery — governments have a far ‘better’ option: they can make more currency by issuing intangible assets, borrow on them and then pay interest to the finance industry.

Evidence of the reality of Australia’s debt crisis is the country’s current credit rating which is a reflection of how concerned lenders would be if approached by Australia for a loan. Issuing intangible debt will not work forever as there has to be an element of trust to a rational person that the currency does represent something, and the US and UK seem to understand this.

However, if the current Australian Government’s low percentage of debt to GDP suggests we have a ‘debt crisis’, why isn’t there continual coverage on when the US or UK economies will collapse, causing a global financial depression greater than the GFC and Great Depression combined, together with ‘experts’, time clocks and the usual level of media hyping. Could it be that Australia’s debt crisis is politically motivated rather than a reflection of the current global perception of our ‘national debt’?

Is the current rhetoric to repay debt necessary?

Should the Australian Government be attempting to improve the wealth of all Australians rather than reducing expenditure?

What do you think?

The government doesn’t understand

For those who have followed my comments on TPS, you will probably know by now that my working life was spent in Aboriginal and Torres Strait Islander affairs — and I still prefer that nomenclature even though the government changed it to indigenous affairs some time ago. This piece is about a basic problem faced by government in Aboriginal and Torres Strait Islander affairs, although couched in a more personal account of those years.

The main problem most governments have had in Aboriginal and Torres Strait Islander affairs is that they just don’t get where the people are coming from; they fail to understand what it is that Aboriginal and Torres Strait Islander people really care about. Or, if they do understand, it certainly does not seem to the people that it is reflected in government policy.

I will focus on Aboriginal people because there is a slightly different set of issues, although related, regarding Torres Strait Islander people.

I worked in this area for thirty years and like to think that I did develop a reasonably good understanding. Perhaps some of my old Aboriginal friends will tell me otherwise, but I was at times recognised as a whitefella that people could come to for assistance even if it was for matters that weren’t technically my responsibility within the public service structure. But I knew the importance of personal relationships to the people and I would chase up the issue and get back to them, or make sure the person responsible did. In some cases I was picked out as the go-between in negotiations between communities and government officials who were senior to me. I understood the importance of a go-between in Aboriginal culture: a person often used to avoid any sort of embarrassment for important people in the community (for example, to avoid having a senior elder speak only to have his ideas rejected by a young government official — I could take the views back and forth and save face for everyone). And they trusted me to present their views in the way they wished.

Too often governments and public servants have not understood.

One of the first examples I came across, and partly where my learning began, was the written minutes of a meeting between a community and government officials in the mid-1970s which referred to an elder of the community making a speech for his land. An Aboriginal officer, who had attended the meeting, pointed out that this was actually a significant and heartfelt speech in the best Aboriginal oratorical tradition but it had been dismissed in a single short sentence by the white official recording it.

On a later occasion I was accompanying a local departmental officer on a visit to a community in WA when we got word that the elders wished to speak to us. (I should point out that elders are not necessarily old. I have personally known of instances where men in their 20s and early 30s have become elders owing to deaths within the family.) We were led to the edge of the community where the elders were sitting in a circle in the red dust. We joined the circle and sat. One by one the men rose to speak. I recognised this as a traditional formal meeting. Each person would rise and state their view, often (at least in English) interspersed with phrases like ‘this is only what I think’ or ‘I might be wrong’. In such meetings, the most senior person is usually the last to speak. When he rises, he does not get up and say I agree with what has already been said, he, just like everyone else, makes a speech stating his view: if that view is the same as the others then an agreement has been reached but, if it is different, the meeting will break up and will come together again in a few days, or even a few weeks, and that will continue until such time as everyone expresses the same view. That traditional way does not contain the cut and thrust, and questioning and clarification that we are used to in meetings. I knew this, but I was surprised when the local officer, who supposedly knew these people, began interrupting those speeches and asking questions.

Another example arose after viewing artworks by a community in the east of WA. We were having tea and coffee afterwards and I was at a table with two of the old men and a young white woman who worked with a local Aboriginal organisation. She began asking one of the men about his painting — a painting about Aboriginal knowledge of Lasseter (of lost gold reef fame) — about its track and where it went. I could see both of the men avoided giving a clear answer and as the young woman persisted, I thought they looked uncomfortable while still not answering her. When she left the table, I continued talking with them and discovered, as I had suspected, that they could not talk about the other end of the track because that belonged to the ‘Docker River mob’. Traditional people can only talk about their own country — if the young woman wanted to learn more she would need to speak to people at Docker River (now Kaltukatjarar). I did mention the situation to the chairman of the organisation the woman worked for and he said: ‘She should know that.’

That capacity to only speak for one’s own country has been a problem for government in creating Aboriginal representative organisations, whether elected or appointed. Although a person may be chosen to represent all of Cape York, they cannot speak with authority or make decisions for people on other country, even within Cape York. I have witnessed situations where, like the old artists, the representative avoids giving a straight answer because he knows he must go back and pass the information to the right people and wait for their decision before he can give an answer. In some ways he is still like a go-between, although the government and many public servants think he is a representative in the political sense we use the word and are surprised that he will not make a decision.

I used to remind my colleagues that, as public servants, we go into meetings with other public servants not expecting firm answers immediately (that is, we don’t expect other public servants to have plenipotentiary powers) but expect that they will go away and consider the issues and come back with an answer when they have spoken to the right people and received approval for their answer. Yet, for some strange reason, we often expected Aboriginal people to give us an answer straight away and did not extend to them the same courtesy of needing time to discuss and confirm the decision they might need to make. Traditional decision making can take time, which was something the people were rarely granted. Government invariably wanted a quick decision so it could announce the next grand scheme.

Related to that is the issue that governments seem to want Aboriginal people to speak with ‘one voice’. Ministers have become frustrated that they can’t get a single decision, or even position, on an issue. I do not understand why that is so. After all, they are politicians and operate in a world of competing interests and yet, when it comes to Aboriginal people, they often seem to think there should be no competing interests.

The idea of ‘one voice’ seems to spill over into a ‘one size fits all’ approach to much of the delivery of services, which becomes almost integration by stealth. The emphasis on education, jobs and housing may not be as relevant to some of the more traditional communities as it is to urban Aboriginal communities. I recall a small group in the Kimberley who were allowed to design their own houses. What they came up with was a large concrete slab covered by a corrugated iron roof, with one or two small lockable rooms at the centre. The living and sleeping areas were the large verandah created by the design. It was what the people wanted at the time but not the sort of dwelling the politicians could show the media as a sign of ‘improvement’.

Similarly when one community was given local council powers to manage its own affairs, it was thought that this would create opportunities for local people to fill the management positions for council services. A few years later it was found that all those positions were filled by white people. Why? — because the local people saw that as ‘whitefella business’, while they were busy with important ‘blackfella business’.

Education, health, housing, economic development and so on are important but, unless government comes to grips with the differences between, and even within, communities, many programs will continue to fail.

Over the years the government has tried at times to bring an Aboriginal perspective to government policy and service delivery. It could be argued that the appointment of an Aboriginal man, Mr Perkins, as Secretary of the Department of Aboriginal Affairs was one such attempt.

ATSIC was another: although there were rumours that ATSIC was also a means of depoliticising Aboriginal affairs by allowing the minister to rise in parliament and say issue ‘x’ or ‘y’ has ‘nothing to do with me’, it is a matter for ATSIC.

ATSIC was heavily criticised but often for the wrong reasons. It had no control of Aboriginal health or education funding — they rested with mainstream government departments. Much of the funding it did receive was locked into programs determined by the government: so even if ATSIC thought the priorities for funding should change, it had little scope to do that without prolonged argument with the government. The government, in my view, was more often concerned about how things would appear to the wider electorate, rather than what the Aboriginal people actually wanted — such as the difference between a conventional three-bedroom house and the type of house I described above.

Despite that, ATSIC did bring a greater understanding (for the most part) to Aboriginal issues, and a large number of Aboriginal staff also helped. Even with ATSIC in operation, some traditional communities were still critical of its approach.

How to deal with the more traditional communities is a problem that has never been solved by the politicians or public servants.

When ATSIC was abolished in 2005 it was not only the Aboriginal commissioners who disappeared from the scene. What many may not know, is that there was also a purge of Aboriginal and Torres Strait Islander staff. It was claimed that many were not good enough public servants, ignoring the understanding they brought to dealings with Aboriginal people. For me, the attitude of some of the new staff who came into Aboriginal affairs was frightening: they knew almost nothing about Aboriginal people, their thinking or their values.

Now I come to the politicians themselves.

Politicians regularly visit Aboriginal communities, sometimes too often. One community I visited had had five fly-in-fly-out visits by federal and state politicians, and senior public servants, in the space of two to three weeks. Each visit disrupted normal community activities and it wanted the visits to stop or, at least, be limited.

Communities do view visits by prime ministers as significant but I don’t think the prime ministers understand the experience in the way they should.

The community acknowledges the high office of the prime minister but I think it is rare that prime ministers acknowledge the high office of the elders to whom they may speak. And our prime ministers fail to understand the significance of some of the gifts bestowed on them because they do not understand the depth of feeling behind them.

In 1998, John Howard visited Galiwinku in Arnhem Land and was given the great honour of having the group’s Dhulmi-mulka Bathi hung around his neck. These were the equivalent of their traditional ‘title deeds’. ‘By doing this the leaders hoped to impress upon him the inherent depth of Yolngu law.’ In my view, it was tantamount to making him an honorary member of the clan, giving him a responsibility to maintain those ‘title deeds’.

I recall thinking at the time that Howard had completely failed to understand the significance and value of what he had been offered: that he had been allowed to meet the leaders of a nation who also had their own parliament (the Ngärra), on their own land, and they had granted him access to their country and effectively welcomed him into their clan.

Once on a visit to a community in the Kimberley I had been taken by the old men and shown important objects. I understood the honour and trust that this bestowed and I did feel a sense of obligation to that community afterwards. Politicians should understand this. After all, they receive donations and then have a sense of obligation to the donors, but they are blind to the value of what Aboriginal people offer them.

Abbott is now promising he will, in September, fulfil his promise to spend a week in Arnhem Land. I have no doubt that he will be the same as previous prime ministers and completely fail to understand the experience.

I will finish with a couple of quotes from Galarrwuy Yunupingu who, although he has moved in the highest political circles, remains a traditional man and these quotes give a glimpse of what the politicians and many public servants are missing:

The clans of east Arnhem Land join me in acknowledging no king, no queen, no church and no state. Our allegiance is to each other, to our land and to the ceremonies that define us. It is through ceremonies that our lives are created. These ceremonies record and pass on the laws that give us ownership of the land and of the seas, and the rules by which we live. Our ceremonial grounds are our universities, where we gain the knowledge that we need. The universities work to a moon cycle, with many different levels of learning and different ‘inside’ ceremonies for men and women: from the new moon to the full moon, we travel the song cycles that guide the life and the essence of the clan — keeping all in balance, giving our people their meaning. It is the only cycle of events that can ever give a Yolngu person … the full energy that he or she requires for life. Without this learning, Yolngu can achieve nothing; they are nobody.

My inner life is that of the Yolngu song cycles, the ceremonies, the knowledge, the law and the land. This is yothu yindi. Balance. Wholeness. Completeness. A world designed in perfection, founded on the beautiful simplicity of a mother and her newborn child; as vibrant and dynamic as the estuary where the saltwaters meet the freshwaters, able to give you everything you need.

What do you think?

You reap what you sow

During the June prior to Senate changeovers, as June 2014 is, it is traditional for retiring senators to give a valedictory speech. Senator Ron Boswell (LNP Queensland) gave his speech on 17 June after 31 years in the Senate. Although never a cabinet minister, Boswell is renowned for fighting off a challenge from Pauline Hanson’s One Nation Party in 2004. Boswell’s television advertising in the 2004 election campaign was corny but apparently successful. The underlying message of the advertising was, however, very clever: ‘he isn’t pretty, but he’s pretty effective’. Even Senator Larissa Waters (Greens Queensland) tweeted upon Boswell’s announcement that he would not recontest his seat: ‘While I don't share Ron Boswell's views on most things, you gotta respect 30yrs of service.’

The Australian Democrats were formed in 1977 with former Liberal Party minister Don Chipp as leader. They saw themselves as a centrist political party and they claimed on a number of occasions that they would ‘keep the bastards honest’. Meg Lees, the leader of the Democrats in 1999, made an agreement with then Prime Minister John Howard allowing the passage of the GST Legislation, provided some goods and services were exempt from the 10% tax. It has been claimed that the Democrats never recovered from the internal division created by that decision and, by 2012, the Democrats were being written off by Crikey as a spent force. Today they seem to have two presidents, two websites (here and here) and they certainly have no members of parliament.

The Abbott government is currently going through a period of unpopularity similar in metrics to that of the Gillard government, if the opinion polls are to be taken at face value. In fact, opposition leader Bill Shorten ironically suggested at the recent Mid-Winter Ball that ‘much had changed’ in the past 12 months in federal parliament: the government is behind in the polls, the prime minister is being hammered over unpopular taxes and broken promises, unruly backbenchers, a leadership contender saying he’s not interested in the leadership, and so on. Is it that the policies and media teams of each government were/are equally inept or is there a reason that has considerably more logic to it sitting below the surface?

Lets go back to July 2013 when Waleed Aly, writing in The Monthly suggested:

Abbott’s attack on Gillard’s broken carbon-tax promise has made the sanctity of one’s word a litmus test for legitimacy, but he has no compunction about reneging on written agreements that no longer suit him

On April 27 2014, Business Insider reported

Here’s something you can expect to hear a lot about in the coming weeks: the moment when Tony Abbott said a Coalition government would introduce no new taxes.

The Prime Minister today did not deny reports of a new income tax under consideration as part of the Coalition’s approach to reducing the budget deficit. The reports suggest it will be a short-term “deficit tax”, mainly targeting higher-income earners.

If you follow the link above, you can hear Abbott say it at one of the multitude of press conferences at unsuspecting businesses — this time however he is strangely not dressed in the customary, immaculate hi-vis vest. Not all is lost — the language is appropriately mangled.

We now know that in addition to the ‘deficit tax’, there have been a number of alterations to existing financial arrangements that generally affect the less well off in our community. They include the $7 ‘co-payment’ for visiting a doctor, (with the possibly unintended side effect of a reduction in donations for medical research) the raising of the pension age to 70, and those under 30 seeking unemployment benefits will be required to wait 6 months before they are permitted to receive a welfare benefit from the Government.

It will probably be argued for years to come whether Gillard lied about the imposition of a carbon tax prior to the 2010 election — and at the end of the day it’s unimportant. The fact is that Gillard did say the words that there would be no tax on carbon — as reported frequently. The full response to the question by Bill McDonald (then with Channel 10 Brisbane News) is here (from about 2:20 on the video). Clearly, the full answer is too long for a 30 second grab (so loved by the electronic media) especially when the opposition leader seems to believe ‘win at all costs’ should be his overriding concern. Abbott ran hard on no new taxes for the entire period of the Gillard government — calling Gillard a liar on the issue — and while he probably didn’t suggest ‘the carbon tax’ was the reason for the dearth of anything decent on television on a Tuesday night, as reported in The Shovel, he did make a number of claims regarding the effects of additional taxation and how he would not impose new taxes while ‘fixing the budget’ (as recorded by the ABC’s Factcheck Unit).

You could argue that Abbott, himself, came to power on a lie. His ‘promise’ to rescind the ‘carbon tax’ immediately was clearly not achievable. The legislation to remove the emissions trading scheme was before parliament in the middle of this year, some nine months after the election. Ironically while attempting to steer the removal legislation through the parliament, Abbott is attempting to reintroduce fuel excise indexation — a de facto carbon tax (the more you consume through either driving a greater distance or using a vehicle with higher fuel consumption, the more you pay).

While refugee boats have slowed, others will tell you that it is not solely due to Abbott’s ‘stop the boats’ promise.

The ALP’s report on the loss of the 2013 election blames disunity within the ALP, as well as some questionable campaign decisions, but notes that, if Gillard had led the ALP to the 2013 election, the result would have been worse. The mantra of broken promises would have contributed to the loss, along with a clearly identifiable division within the ALP. Abbott had a considerable part in crafting the message of ‘broken promises’.

Now that Abbott is the prime minister, there is apparently a higher standard of truth expected from him and his government. John Hewson, former Liberal Party leader and Abbott’s former boss, has been reported in the Fairfax Media as critical of Abbott’s approach:

His broadest critique is that Abbott, for four years his press secretary and political adviser, has failed to communicate a vision: “They had a chance with the budget to pull all these bits and pieces together; the end of the age of entitlement, fine; not supporting industry, fine; now pull it all together,” says Hewson.

“Where the jobs are going to come from, where the growth is going to come from, what Paul Keating called an ‘overarching narrative’. Have a consistent message.

“There’s no clear, consistent message, other than, ‘We have to cut and cut more and more just to get the budget numbers’, not with any reform purpose. It’s unfair and it’s inconsistent. A bit of vision is what’s really called for.”

Maybe the real issue with the ‘vision thing’ is that people really want to know what their politicians can deliver, rather than what they would like to deliver. Without getting into the semantics of ‘budget emergencies’; ‘class warfare’; ‘trickle up or down economics’ etc., are politicians failing the community by attempting to be too clever?

Ron Boswell’s campaign advertising from 2004 didn’t claim that he could fix everything — all it did was claim that he wasn’t pretty (true, he has a great face for radio) but he was pretty effective. As Larissa Water’s tweet on his retirement announcement suggested, 31 years in the Senate is a distinguished career, and if he wasn’t ‘effective’ (in the eyes of his political party) as claimed, he would have been removed long before being allowed to retire on his own terms.

The Australian Democrats came to prominence on the slogan of ‘keeping the bastards honest’. For a long time, they appeared to do just that. Rightly or wrongly, Meg Lees’ agreement to the GST created a lot of division inside the party and throughout the wider community, to the extent that the perception of the Democrats changed from one of keeping them (the two major parties) honest, to being just another grouping of the ‘bastards’.

Rudd called climate change ‘the greatest moral, economic and social challenge of our time’ until he lost the vote in Parliament. Then somehow it went away.

Gillard managed to legislate a response to climate change through the Parliament which wasn’t sold well by the Government of the day. By agreeing in interviews that the fixed price for carbon trading could be construed as a tax, it made her whole ‘there will be no carbon tax’ claim unsupportable. Certainly there were external factors at work as well, but the claim of lies over the introduction of a carbon price could be the bedrock on which all other claims had their foundation.

Abbott came to power on slogans: ‘no new taxes’; ‘stop the boats’; ‘fix the budget’, and the impression was that action would be immediate. The reality was that very few of his promises could be immediately implemented. You would have to wonder if Abbott and his campaign team ever wondered how they would ‘fix the budget’ without changing taxation or benefits; or commence the process of repealing the ‘carbon tax’ on Day 1 (as promised). This ABC opinion piece written the day prior to the election demonstrates some of the problems Abbott faced, and still faces, in matching the actuality with the rhetoric prior to the 2013 election. Clearly it hasn’t gone to plan — if, in fact, there was a plan.

Waleed Aly’s piece in The Monthly claimed that Abbott ‘has no compunction in reneging on written agreements that no longer suit him’. Isn’t that the root cause of Australians’ current opinion of politicians? Rather than ‘promise’ whatever it takes to win and then reneging, wouldn’t Abbott (and his predecessors) have been better off taking a leaf from Ron Boswell’s campaign and suggesting they will be effective in responding to issues as they arise? Surely Australians deserve more information than could ever be contained in a 30 second sound bite — which seems to be the current ‘gold standard’ for truth in Australian politics?

After all, as John Maynard Keynes is reputed to have said ‘When the facts change, I change my opinion — what do you do, sir?’

What do you think?

Do you know a con-artist when you see one?

After many pieces about many issues, I’m ready to have my say about Abbott himself. So sit back with a beer, or a glass of your best red, and come along for a short ride. 

I won’t bother going over his broken promises and lies. There are many other people already doing that. The only point to make is that condemning Abbott for deceit is a ‘lay-down misere’. (For those who don’t know that expression, check out the rules of the card game Five Hundred.) 

The people have now seen through Abbott. He gave indications of his real self over the years, with what became known as ‘Abbottisms’, but I think many people simply accepted these as the gaffes that most politicians make at different times. He did give clues that he couldn’t be believed, such as the famous interview with Kerry O’Brien in 2012 when he explained that we should only trust his scripted remarks. 

And at his swearing-in as prime minister he said:
We hope to be judged by what we have done rather than by what we have said we will do.
That has also registered with the voters and they are now judging what he has done

Abbott says these things because he obviously can’t think on his feet. Someone like Keating always had a quick answer and could turn defence to attack with well-aimed barbs. Abbott is incapable of doing that. His thinking is obviously slower. He does not retain the facts of a situation to draw on quickly when making a reply. He is hopelessly reliant on his preparation — his scripted remarks. I think the lack of retention even creates difficulties when he has been well prepared beforehand. Once he has to leave his script or briefing behind, it appears he can’t remember all of it and still flounders for what he can recall and what words he is supposed to use. That gives rise to the slow speech and the repetition of words and phrases as he tries to dredge something up from what he can remember of the briefing. 

The electorate knows now that they were conned, and they don’t like it. Australians can usually detect bulls**t and know to take no notice of bulls**t artists, or sometimes to be even a touch sympathetic towards them because the poor buggers can’t help themselves. But when a bulls**t artist becomes a con artist, that is an entirely different matter, a major crime because it takes advantage of our egalitarian and trusting nature. 

Australians are used to politicians’ bulls**t and accept some level of it in the context of elections. John Howard said recently, Australians will accept change and reform by government if they can see that it is in the national interest and is ‘fundamentally fair’, even if it was not part of the bulls**t promised before the election. 

Abbott, however, took this to the next level. He said different things to different audiences. He said one thing one week but something different the next. He got away with it because most people heard or read little about the inconsistencies. (Thank you mainstream media for not giving those inconsistencies the prominence they deserved.) On his overseas visit in June, he had the gall to tell President Obama that the increase in the petrol excise was like a carbon tax. When his predilection for telling different audiences different ‘truths’ extends to foreign leaders, then this is a man that even foreign leaders cannot trust. 

His bulls**t includes that he hadn’t even said the bulls**t in the first place; that the electorate had not heard him properly, that it had misunderstood. One of the greatest crimes a politician can commit is to call the electorate ‘stupid’, which is basically what Abbott has done. 

Abbott has lost credibility, not just because he lied to the electorate but because the lies were part of an elaborate con which has now been laid bare and he has effectively told the electorate so by telling voters they weren’t listening to what he actually said. That should make it next to impossible for Abbott to recover. 

However, never write off a con artist. Even when they seem down and out, they will still be scheming, still telling lies, still running the con. And don’t forget, the con is not just being run by Abbott. He is only the front man. The con is part of the master plan of Abbott’s handlers and supporters. 

Even the budget was a con and will likely lead to another con. 

The MYEFO and the budget are basically political documents (which I will explain in a moment). It is only the PEFO (Pre-election financial outlook) that comes out with purely Treasury estimates. The PEFO last year showed a budget deficit of about $60 billion over the forward estimates (four years). But when Hockey put out the MYEFO that had grown to $120 billion, largely from the proposed abolition of the ‘carbon tax’ and other decisions by the Abbott government. By the time of the budget, with the drastic cuts contained in it, and foreshadowed by it, the deficit over four years was reduced to — you guessed it — $60 billion dollars. This is the old ‘sale’ trick: if I increase the price of my $50 item to $100 for a week or two and then ‘slash’ it to $50, I can tell people they are getting a 50% reduction, and I haven’t lost a thing, just suckered in the punters. I think Abbott and Hockey may have learned that from their business mates. 

What helps make MYEFO and the budget political, rather than just economic estimates of finances, is the choice of forecasts offered to the Treasurer. The Treasury, as with the making of most economic predictions, bases its forecasts for the forward estimates on a number of variables and provides the range within which those variables are likely to operate: for example, GDP may grow anywhere between 2.25% and 3.00% and so forecasts based on 2.25%, 2.5%, 2.75% and 3.0% may be considered. But instead of Treasury economic experts saying 2.75% is our best estimate, it is the Treasurer who decides which set of forecasts to use. 

Just after the budget, there were some financial experts suggesting that the budget estimates were ‘conservative’ or, in other words, on the low side of the potential range of future growth. Why are they low? — because that is the range that Hockey selected. 

Why would he select the lower growth forecasts? — because it helps justify the ideologically driven cuts. They divert attention from the real underlying reasons for the cuts and allow the debate to centre on the ‘finances’: whether or not a commentator believes or contests the figures, they are still debating the figures, not the ideology. 

Also it lays the ground work for the next con. If, prior to the next election, the economy is performing at 3% growth or better, as is quite possible, Abbott and Hockey will claim all the credit, even though this may well be within the range of forecasts originally presented by Treasury. They will say, yes, our first budget was tough but look at what it has achieved. And now because of that, you can all have a tax cut (including big business of course). 

Although I have no evidence, I have a gut feeling that Wayne Swan, when he was Treasurer, made the opposite mistake: he tended to adopt the more optimistic forecasts. Why? — because Abbott had also conned him. The constant Abbott attacks on Labor’s economic management may have conned Swan into thinking he could disprove that by using the upper range of forecasts. In his case, when the real growth did not quite match the forecasts he used (although perhaps still within the Treasury range of forecasts), and revenue was less, he was left open to more attacks by Abbott and the opposition. It was a con that led to a win-win for Abbott. If Swan had adopted the lower forecasts he could have been attacked for ‘slowing’ the economy. Nice con if you can pull it off — which Abbott and his side did with the help of the media. 

I also think Abbott’s whole persona is a con: not just the makeover that was undertaken to make him appear more presentable on television, but take a look at his body language. 

He walks with an exaggerated swagger, a style of walk often described as using more space than is necessary for normal locomotion. The only other world figure I have noticed who walks with a similar style is Putin but I don’t think Abbott is in the same poltical power league — although he may like to think he is. 

The swagger is most often associated with machismo and arrogance, although it has also been linked with narcissism. Abbott tries to play up the machismo but may not realise he is also displaying arrogance. Since the election, Abbott has once or twice tried to suggest that he can be a caring and sympathetic prime minister but people will not hear that message while he continues to swagger. 

One other interesting habit of Abbott’s body language is the use of his left hand in handshakes, when he grasps the other person’s wrist or forearm. Allan and Barbara Pearse in The Definitive Book of Body Language describe this handshake as the ‘double hander’. It is normally a sign of sincerity and closeness and is seen as an ‘intention movement’ towards a hug: the left hand can be placed over the other person’s hand, or almost anywhere along the arm up to the shoulder, and more rarely on the other person’s back. It is usually used between people who are close, not with total strangers. The book states:
… if the person who gives you one doesn’t have a personal connection with you, look for the hidden agenda. It’s common to see politicians greeting voters using double-handed handshakes and business people do it to their clients without realising it can be business and political suicide, putting people offside.

The Pearses suggest that it is easier for us to control our hand signals than it is to control the body language signals portrayed by our legs. On that basis, I would suggest that Abbott is deliberately trying to conceal his arrogance (the swagger) by artificially portraying sincerity (the double hander). In terms of body language these could be called ‘contradictory signals’, which may be another reason why people generally have an uneasy feeling about Abbott — they cannot interpret these signals when they offer two conflicting images of the man behind them. 

An opposite interpretation is that Abbott is basically insecure and out of his depth, so deliberately adopts these postures to hide his true nature. The following video may suggest that he is not as assertive and confident as he likes to suggest. 


I leave that one for you to consider. 

Either way, his public persona, as well as his public policies, are a con. 

So now, do you know a con artist when you see one? 

What do you think?

The accidental prime minister

Our current prime minister assumed office on 18 September 2013. He was elected as leader of the opposition on 1 December 2009, taking over from Malcolm Turnbull who lost the leadership spill by one vote. Joe Hockey, the current Australian treasurer, also stood for election as party leader and opposition leader in the internal Liberal Party election but was eliminated in the first round.

At the time of Abbott’s election, the ALP, with Kevin Rudd as prime minister, was planning the introduction of emissions’ trading legislation. Turnbull was intending to allow the legislation to pass, with amendments; a view that was not generally supported in the Liberal Party. The amendments had been negotiated with the ALP and were ready to be passed through the parliament.

As they say, the rest is history. Abbott became opposition leader and instituted a number of three word slogans such as ‘no new taxes’, which resonated with a significant proportion of the Australian public. Rudd subsequently was removed from office resulting in Julia Gillard becoming prime minister. She won the 2010 election with the assistance of some independent MPs but was subsequently replaced during the first half of 2013 by Rudd (whom she had deposed three years earlier) in a failed attempt by the ALP to retain power at the 2013 election.

This piece is not going to be another ‘where did the ALP go wrong’ monologue — rather it exists to ask the question: is Tony Abbott the accidental Prime Minister, due to not only the ALP’s ‘impressive’ ability to shoot itself in the foot, but a much better than expected reaction to Abbott’s slogan-based ‘promise the earth’ form of politics?

Abbott led the Liberal/National Party coalition to what could be called a thumping victory at the 2013 election. The LNP gained 18 seats with a swing of 3.61% of the vote and understandably, in the eyes of the LNP, Abbott could do no wrong. For a considerable period prior to the election, the polls suggested that the LNP would have received a higher vote than the reality on 18 September. The discussion on whether Rudd’s re-elevation reduced the margin can be had another day.

The Political Sword has commented before on the period of inaction immediately following the 2013 election. However, what we didn’t contemplate at the time was that, rather than attempting to reduce the heat and tension in Australian politics, there was actually a ‘we won — what do we do now?’ paralysis surrounding the newly minted Government, despite the probability suggested by pre-election polling that Abbott would walk into Kirribilli House — like Howard, Abbott prefers to live in Sydney.

Prior to the election, Abbott claimed repeatedly that he and his coalition was ‘ready to govern’. In this transcript of the ABC’s AM program, Abbott claims:

“Look, we are ready to govern. We've got a clear plan. On day one, there would be no mining tax, no carbon tax. In week one there'd be a debt and deficit reduction taskforce. In month one, we'd start the tax reform debate that Australia really needs and has substantially missed out on.

Within three months, we'd be looking at small business reforms. So look we've got a clear plan to get our country back on track.”

Without being too cynical, some ten months after the election the ‘mining tax’ and ‘carbon tax’ repeals still have to get through the parliament; the ‘debt and deficit reduction taskforce’ report is missing in action; and, there seems to be little if any headway on a ‘tax reform debate’ except for a bit of ‘kite flying’ about raising the level of the GST from 10% to 12.5%.

Soon after the election, the rhetoric started. Despite the public comments of Joe Hockey, Michael Pascoe wrote in a syndicated article across Fairfax media:

It's yet another case of politics overshadowing economics: while newbie Treasurer Joe Hockey insinuates otherwise, the final count for the 2012-13 federal budget is an outstanding achievement, a monument to a skilled Treasury performance in very difficult circumstances. No, seriously.

Pascoe went on to suggest:

After that exercise, the economy is not strong enough to handle further severe fiscal contraction just yet. And that's why Joe Hockey is letting the deficit run this year, never mind his political rants, announcing that he will trim the budget by all of 0.4 per cent. Big whoop.

Given the challenges facing us a little further down the track, the structural deficit does indeed have to be tamed with a mixture of genuine tax reform and entitlement restraint, but not just yet.

By the day of the federal budget, Hockey had again played the ‘budget emergency’ card — it’s a pity that he didn’t fool many, including Peter Martin, Fairfax’s Economics editor, who discussed the ‘entitlements’, from strategies such as clothing and vehicle expenses, work related expenses, donations, negative gearing and structuring income and taxation affairs after considerable advice from taxation and accounting professionals.

“Pain all round” will be the rallying cry of the night. Joe Hockey says his first budget ̶ tonight ̶ will hit everyone from high earners to politicians to Australians too poor to pay to see the doctor. All of us will have to “contribute budget repair”.

Except that we won’t.

Another one he didn’t convince was Greg Jericho, writing in his ‘Grogonomics’ series in The Guardian the day prior to the budget announcement that ‘Slamming on the fiscal brakes isn’t [a] smart way to keep the economy moving’. Jericho’s article (with the customary number of graphs) goes on to demonstrate the point, finishing with:

Last week in a photo-op with the secretary of the Treasury, Hockey suggested he did not think the budget would “detract from growth at all in the short-term”.

This would please the OECD which warned the government in its latest economic outlook, issued last week, that due to difficulties from the decline in the mining sector “heavy front loading of fiscal consolidation should be avoided”.

Pascoe, Martin and Jericho each state in their articles that various economists had advised the current Australian Government that severe budget cuts will weaken the Australian economy.

So, instead of altering existing arrangements, such as the apparent need to obtain a new general practitioner referral each year to see a medical specialist about a chronic condition, or looking at negative gearing, donation thresholds and so on, the government introduces a $7 co-payment on the ‘universal free heath care system’ known as Medicare. Hockey responded to criticism of the $7 co-payment for routine GP visits ‘by saying doctors could instead take a cut to their Medicare rebate without requiring patients to make up the shortfall.’

Despite the co-payment not being required until July 2015, the government’s lack of ability to actually sell a message without a three word slogan has ensured that general practitioners are already seeing significantly fewer patients.

Keperra Medical Centre practice manager Lisa Thorne said patient numbers had dropped by at least 100 per week — equivalent to the workload of one full-time doctor — since the Federal Government announced the introduction of the co-payment, despite it not due to take effect until July, 2015.

There is some other evidence of Hockey’s ‘budget emergency’ beginning to affect consumer spending with new car sales falling, house prices falling, and a significant drop in consumer confidence.

Hockey is not the only Minister that hasn’t changed approach from when he was in opposition. Let’s quickly look at Scott Morrison, responsible for ‘border protection’, amongst other things.

As early as October 2013, the ABC Fact Check unit was questioning Abbott and Morrison’s use of terminology in regard to refugee boats.

In January 2014, UNHCR was questioning the legality of the boat turn back policy.

Spokesman for the United Nations Refugee Agency (UNHCR) Babar Baloch says the organisation is seeking an explanation from the Australian government over reports a number of asylum-seeker boats have been returned to Indonesian waters.

Mr Baloch said the UNHCR found a policy of "pushing" back asylum-seeker boats "very concerning".

"Any such approach would raise significant issues and potentially could place Australia in breach of its obligations under the Refugee Convention and international law," he told ABC radio on Saturday.

February saw headlines regarding claims that Australian Border Protection had forced refugees into lifeboats and ensured they returned to Indonesia. Morrison acknowledged the Australian government was behind the lifeboats turning up in Indonesia during March, around the time he stopped the regular press conferences regarding border protection issues.

UNHCR, through spokesman Thomas Vargas, told the Australian Government in April:

“There’s no reliable information that connects the drop in registration numbers at the UNHCR with the policy that Australia is implementing,” he told reporters in Jakarta on Tuesday.

The (people) smugglers are not going to go away, they may just find a different way of doing things.

That's why countries need to work together.

Unilateral solutions and even bilateral solutions are not going to solve the problem.”

The public relations disasters listed here by senior government ministers demonstrate that either they don’t follow the direction of the prime minister or the prime minister believes that his process of ‘promising the earth then delivering nothing like it’ is a valid process. Similar disasters have been made by other senior ministers and there are countless examples should an internet search be carried out in specific areas of federal government responsibility.

The rationale behind claiming that Abbott is the accidental prime minister is this. Clearly, he and his senior ministers still believe they are in opposition and are demonstrating they are great with the rhetoric but clearly don’t understand the ramifications of their statements — something best left for opposition parties that don’t have to implement their pronouncements.

Abbott left the country late in May for what was effectively a ‘round the world tour’, calling at Jakarta (to mend fences with the Indonesian President), attending the D-Day remembrance ceremonies in France (and generally reported as an afterthought in the Australian media as the conclusion to the reporting of a magnificent speech by Queen Elizabeth) and then to Washington DC where he cancelled meetings with economic leaders who will be in Brisbane during November for the G20 meeting. Abbott’s only ‘newsworthy’ input, apart from the obligatory shots showing him meeting foreign leaders and mangling the French language as expertly as he mangles his native English, was that he somehow linked D-Day to the rescinding of the ‘carbon tax’ rather than looking at the historical significance of the event.

Was it a coincidence that Turnbull (Abbott’s immediate predecessor as Opposition Leader who lost the 2009 leadership by one vote) was being accused of a leadership challenge while Abbott was out of the country? While the machinations of the removal of Gillard by Rudd occurred on live television immediately following an overseas trip, the conservative side of politics also has form in this area. NT Chief Minister Terry Mills was on a ‘trade mission’ in Asia during March 2013 when he was ‘sacked’ by his party room and told of the fact by telephone, and there was the resignation of Ted Ballieu as Victorian premier in the same month.

The LNP won the 2013 election with a two party preferred vote of 53.49%, but, if an election was held today, the polls are telling us (at the time this was being prepared) that the ALP would receive a similar level of support as the LNP did in 2013. Turnbull was more popular than Abbott in September 2012 and apparently still is.

No one apart from the LNP leadership can state with any certainty that Abbott was or was not ‘meant’ to lead them to power, but there seems to be a concerted effort to make his remaining time as Prime Minister as difficult as possible, with constant leadership speculation as well as a number of senior government ministers, including Abbott himself, ‘opening their mouth to change feet’. Both sides of politics have demonstrated they will sack a leader should they see a political advantage — and while Turnbull’s ‘popularity polling’ numbers are significantly higher than Abbott’s, it is reasonable to assume the speculation will continue.

Was Abbott meant to be the LNP’s choice and do they now realise they picked a lemon? Would Turnbull or anyone else be any better?

What do you think?

The Piketty divide: Part 2

The Right (and I include big business in that) is scathing of Piketty’s conclusions, and of his re-introduction of the role of government into economics. Please forgive a few longer quotes to illustrate the venom of the Right:

Louis Woodhill, a software entrepreneur, claims Piketty has his numbers wrong:

… Piketty’s painstakingly researched numbers are worthless because they ignore the existence of the modern welfare state. Our various welfare programs redistribute a huge percentage of national income and, therefore, for the purposes of Piketty’s comparisons across time, they redistribute the beneficial ownership of capital. … Labor has little to do with economic growth. Capitalism is about capital and knowledge. … Anything you tax you get less of and Piketty’s system would impose huge taxes on accumulating and maintaining assets, which are what drive GDP. Under American capitalism, the ultimate arbiter of ‘common utility’ is the market. … expressed in the form of voluntary offers to buy and sell, into an optimum allocation of resources and an efficient coordination of efforts. When Piketty talks about ‘common utility’, what he means is, ‘common utility as judged by progressive French intellectuals like me.’

In The Wall Street Journal:

Not that enhancing growth is much on Mr Piketty’s mind, either as an economic matter or as a means to greater distributive justice. He assumes that the economy is static and zero-sum; if the income of one population group increases, another one must necessarily have been impoverished. He views equality of outcome as the ultimate end and solely for its own sake. Alternative objectives — such as maximising the overall wealth of society or increasing economic liberty or seeking the greatest possible equality of opportunity, or even … ensuring that the welfare of the least well-off is maximised — are scarcely mentioned.

This last quote on the reaction of the Right, from an opinion piece in Forbes magazine, is quite frightening for what it reveals about the thinking of the extreme Right in America. (I originally thought it was satirical and it took me a few reads to take it seriously. If anyone can show me this really is satirical, I will be much relieved!)

Piketty drops Karl Marx’s name over and over again in this book. Enough to make you think that he’s hiding something. Such as the possibility that he is shilling for Charles Darwin. [that is, for social Darwinism in relation to the role of government]

One of the deadliest threats with which government has ever had to contend, over the entire pageant of human history, was the immense wealth and mass affluence generated by the industrial revolution. The usual metrics point to the exponential growth of goods and services from 1750 until 1914 if not 1929. Exponential growth of what we call the private or ‘real’ sector of the economy — everything that is not government — means that government also has to grow exponentially in order even to be detectable. Moreover, one can ask: if exponential real sector growth occurs over the long run, what possible need could civilization have for government. … World War I was a keen effort to lure the masses away from their pursuits in the real sector to pursuits in the government sector, which is to say trench warfare. In the offing, the real sector took a big hit … But it remains the Great Depression that has proven the best thing that has ever happened to government in modern times. To this day, memory of the 1930s is still there in the global psyche, convincing people that the market cannot go unchecked, that government has to be nice and big in order for there to be prosperity and economic justice. Cui bono — who benefited — from the Great Depression? Government did. … Signals got mixed, capitalism got the blame, and we haven’t been able to imagine life without government since. The challenge of the 21st century will be to see if we have the courage and the foresight — for we certainly have the means — to permit government to expire.

I won’t critique those comments from the Right but leave them to stand alone and you can judge for yourselves. But you can see what progressives are up against: ‘greed is good’ and ‘no role for government’, even ‘no need for government’.

The Right also like to point out that Piketty himself may become rich from the success of his book.

Here in Australia, Piketty does not seem to have hit the headlines. He is being discussed by local economists. John Quiggin, for example, has suggested that Piketty may be a little pessimistic about the possibility of success in introducing taxes on wealth because measures are slowly developing internationally to eliminate offshore tax havens.

But Piketty has not been a major topic in popular media or among politicians — a few articles over a few days and then, like old news, apparently forgotten.*

Why? Perhaps one reason is that inequality has not been seen as a major issue in Australia, as it has in France, the UK and the US, and has not reached the level it has in those countries, although it is increasing. Our politicians like to talk about equality in terms of fairness and to give Piketty any relevance in Australia would be to turn our political language on its head. Abbott and Hockey’s 2014 budget may do more than Piketty to emphasise inequality in Australia but, taking Bill Shorten’s budget reply as an indicator, we are more likely to continue to focus on ‘fairness’. (The unanswered question being whether ‘inequality’ and ‘fairness’ are addressing the same thing.)

In a speech to the Fabian Society on 18 May, Senator Penny Wong said that the debate on inequality ‘needs to become more prominent in Australia’ but she comes to what, in my opinion, are some strange conclusions. She refers to Piketty’s equation (r > g) but says that Labor, rather than reducing ‘r’, as Piketty proposes with his taxes, should focus on increasing ‘g’.

Labor should not only increase growth, we should also increase people’s opportunities to gain the benefits of growth. The traditional social democratic approach to fairness has focussed on redistribution through the tax and benefits system. But social democratic parties also need to focus on what has been called ‘predistribution’ — helping people to earn better incomes from the market economy in the first place, before the tax and benefits system kicks in.

The emphasis is on education, training and re-training, for what was earlier called ‘lifelong learning’, as an economy changes over time. Senator Wong refers to this as redistributing opportunity.

It is important for the reasons stated by Christine Lagarde, head of the IMF, as quoted by Senator Wong:

Let me be frank: in the past, economists have underestimated the importance of inequality. They have focused on the size of the pie rather than its distribution. Today we are more keenly aware of the damage done by inequality. Put simply, a severely skewed income distribution harms the pace and sustainability of growth over the longer term. It leads to an economy of exclusion, and a wasteland of discarded potential.

Senator Wong’s declared approach addresses Largarde’s ‘wasteland of discarded potential’ but I don’t think it fully addresses Piketty’s basic premise. To achieve greater equality following her approach Piketty’s equation needs to be reversed: that is become, g > r. As suggested in Part 1, that did occur around the time of the World Wars and the Great Depression, and up to about 1970, but it was assisted by much higher taxes and other government interventions. Unless Labor is prepared to tackle the issue in that way, through taxing the rich and thereby reducing the rate of return on capital, the path proposed by Senator Wong may only be addressing half the problem. Without a reduction in the rate of return, a small increase in the rate of growth may not fully reverse the equation and only lead to continuing accumulation of wealth in the hands of the elite, who then have the capacity to pass that to their children, creating dynastic wealth and power (could I possibly mention Gina Rinehart or the Murdoch and Packer families in this context?).

Part of the problem is that progressive parties around the world have bought into the free market philosophy because, in a globalised economy, they now face a dilemma. Continuing to support redistributive policies can lead to investors threatening to move capital and investments abroad and ‘that, in turn, would cost jobs in the national market and result in less economic growth, less public revenue, less social investment …’ The rise of the New Left in the 1970s also shifted progressive thinking from labour rights to human rights. As Christos Tsiolkas has pointed out in his personal account, Whatever happened to the working class? — The left has forgotten where it came from, the progressives often fail to address the real concerns of the workers, and this is not just the old working class but parts of the middle class — the more highly paid skilled workers and ‘cashed-up bogans’ as Tsiolkas calls them.

If many of them were now “cashed-up bogans”, just as many were unemployed. Many were on welfare, many on drugs both illegal and prescribed. Even among the “cashed-up bogans”, there was a real fear about how long this period of extended prosperity was going to last. … They were fearful of a rise in interest rates and in rents and of the loss of permanent jobs to casualisation.

The cost of living, the uncertainty of employment, the erosion of public health and public education — that’s what mattered.

With progressive parties worldwide not apparently listening to those concerns, the underlying conservatism of the working class has tended to move it to the right, and to the extreme right as evidenced by results in the recent European Parliament election. Returning to such basic issues will also have an influence on how inequality is approached by progressive parties.

Although progressive parties face their own problems in considering inequality, we will certainly not hear Abbott and Hockey talking about Piketty or inequality. While Piketty accepts some level of inequality, he considers that when it becomes extreme it is useless as an incentive and also becomes a threat to democracy. Abbott and Hockey do not see that. As Victoria Rollison described their view recently (and it is worth repeating):

You only have to know their two favourite words to understand Abbott and his government’s entire ideology, which drives their entire raison d’être. User pays. The likes of Abbott’s [sic] have a subconscious thought process that goes something like this: those who are born poor and haven’t worked hard enough are too lazy to stop being poor and are lazy and dependant on hard working rich people who pay taxes. Rich people who pay taxes shouldn’t be relied on to fund the lives of lazy, immoral poor people who are too lazy to get rich and pay taxes. It’s immoral to let people be dependent on the government and a big government encourages people to be lazy and to depend on the government. Big government should be destroyed in preference for a small, useless, and not able to be dependable government. Users should pay their way, so user pays is the best system for funding everything including health, education, infrastructure, community, everything. If user can’t afford to pay, user doesn’t get and user should stop being so lazy and hungry and in need of shelter and should go and get rich so they’re not reliant on the rich people who have to pay tax to support them.

Despite all the evidence, and Piketty and his colleagues have accumulated bucket loads of data, the right-wing believers like Abbott and Hockey will never accept inequality as a problem. They continue to believe that greater national wealth benefits all, which is true to an extent, but not when the top one per cent take the majority of the increase in national wealth and the bottom ten per cent get the crumbs.

Inequality, even fairness, will not be addressed under an LNP government, not until the laissez-faire economic rationalists lose their grip on economic debate and political thinking. Even progressive parties may not tackle the issue effectively unless they also take a stand against the financial markets (perhaps financial transaction taxes) and reconsider taxing the rich and addressing the basic concerns of workers. Piketty, at least, has opened the way for that debate to happen.

* Since preparing this post, I have seen much more discussion of inequality in the Australian media but, as I suggest in the piece, it seems that the Hockey budget, rather than Piketty, has been the driving force for that discussion.

What do you think?

The Piketty divide: Part 1

Thomas Piketty’s Capital in the twenty-first century has taken America by storm. It rose to the top of Amazon’s best-selling list. It brings a scholarly perspective to the issue of rising inequality and of wealth being concentrated in the hands of the few. It has been compared to Marx’s Das Kapital and it has been suggested that it may be as influential. It has also been compared to Milton Friedman and Anna Schwartz’s A Monetary History of the United States in 1963 for the reason that, like that work, it is based on extensive financial data that gives credence to its conclusions — although coming from the opposite side of the political spectrum.

Piketty’s work, of course, is not universally acclaimed. There is a very clear divide between the Right and Left, between progressives and the more radical Left, and between the Anglosphere and the non-Anglo-speaking world.

Piketty, now a professor at the Paris School of Economics, went to MIT in America in 1993 when he was 22 and completed a doctorate on the theory behind tax policies. He returned to France after five years and has remained there since. In 2003 with Emmanuel Saez, another Frenchman, but at Berkley in California, he wrote a paper on inequality in the US between 1913 and 1998. Saez also worked with Piketty on the data for Capital in the twenty-first century.

In France, while the book was recognised as significant, it was not the runaway best seller that it became in America — it was 192nd on the French book publishers’ rankings. One reason is that inequality has long been central to political debate in France, with even the right-leaning Gaullists like Chirac supporting the need to mend the fractures in society. France already has an annual wealth tax on assets. So in that sense, the theme of Piketty’s work was not as novel in France as it appeared in America, dominated as it has been since the 1980s by economic thinking that does not believe that inequality is a problem.

The French Left was critical, considering Piketty did not go far enough: that he failed to discuss cultural and social domination, or violence against and exploitation of the lower classes, or alienation at work, or the role of class struggle.

Why all the fuss?

Piketty has a basic equation developed from tax data across a number of countries going back over two hundred years:

r > g

That is, the rate of return on capital (r) is greater than the rate of growth of income (g). Throughout the nineteenth century and up to World War I, that greater rate of return led to high levels of inequality, with wealth concentrated at the top. In periods of high inequality, the rich can hold capital up to seven times the value of total national annual income (the capital/income ratio).

The rate of growth is influenced by population growth and productivity. Piketty’s data suggest that over the long run, income grows at 1‒1.5% while return on investment grows at 4‒5%. A period of declining inequality, between 1919 and the 1970s, occurred when the rate of growth exceeded the rate of return, fed by population growth, technological progress and government intervention.

As population growth slows (as it is already doing), Piketty suggests that the rate of growth will also slow and we will return to a situation similar to that before WWI. Various economists have already pointed to the slow down in economic growth since 1970, despite technical innovations like the spread of computers and the internet. An article in The Economist showed that annualised growth in the US averaged1.9% between 1947 and 1969, but only 0.8% between 1970 and 2012, creating a 35% gap in growth between where it actually is and where it would have been if the higher level of growth had continued.

One reviewer interpreted Piketty’s approach this way:

If you get slow growth alongside better financial returns, then inherited wealth will, on average, “dominate wealth amassed from a lifetime’s labour by a wide margin” says Piketty. Wealth will concentrate to levels incompatible with democracy, let alone social justice. Capitalism, in short, automatically creates levels of inequality that are unsustainable.

For Piketty, the facts derived from his data indicate that this is the nature of capitalism. The period from WWI to the 1970s was an anomaly and Piketty makes the case that capital in its natural state does not tend to spread out or trickle down but to concentrate in the hands of a few.

The problem is that as wealth becomes concentrated in the hands of the rentiers it can lead to ‘patrimonial capitalism’ (where the economic elite mostly obtain their wealth through inheritance). Some have suggested an inconsistency to the extent that Piketty supports entrepreneurs but is concerned that when they are successful they then become rentiers, and their wealth is passed to the next generation who need undertake little productive activity to maintain that wealth. Piketty argues that if this is left unchecked, wealth continues to accumulate in the hands of the few leading to greater levels of inequality.

Piketty acknowledges that the current situation in the US is different. There, the current increase in inequality has come from the rise of what he calls ‘supersalaries’. Unlike other countries, in the US, 60% of the income of the top 1% comes from ‘labour income’ (the salary packages of the CEOs of large corporations); only in the top 0.1% does income from capital predominate. Although, clearly, within a decade or two this wealth may well turn to inherited wealth based on the accumulated capital.

In an interview where it was put to Piketty that Americans have earned their wealth rather than inherited it, he replied:

This is what the winners of the game like to claim. But for the losers this can be the worst of all worlds: they have a diminishing share of income and wealth, and at the same time they are depicted as undeserving.

A key aspect of Piketty’s work, however, is that it presents a challenge to current mainstream economic thinking.

To understand why the mainstream finds this proposition so annoying, you have to understand that “distribution” — the polite name for inequality — was thought to be a closed subject. Simon Kuznets, the Belarussian émigré who became a major figure in American economics, used the [then] available data to show that, while societies become more unequal in the first stages of industrialisation, inequality subsides as they achieve maturity. This “Kuznets Curve” had been accepted by most parts of the economics profession until Piketty and his collaborators produced the evidence that it is false.

Piketty himself said regarding his approach:

I am trying to put the distributional question and the study of long-run trends back at the heart of economic analysis. In that sense, I am pursuing a tradition which was pioneered by the economists of the 19th century, including David Ricardo and Karl Marx.

So he is also attempting to return economics to the political economics of the best nineteenth century economic thinkers and also return to data as the basis of findings, rather than abstract theories and mathematical formulae.

The Left is not entirely happy with Piketty’s analysis, for example:

… Piketty’s almost exclusive metrics are inequality of income and wealth. They are important to be sure. Let us remember, though, that despite less inequality, most of the period 1913-1950 was hellish for the masses in the capitalist world. They died by the millions in the first world war, made little economic progress in the 1920s, suffered the hunger of the Great Depression in the 1930s, and died by millions more in the second world war. On the other hand, while inequality was high in the late nineteenth century and up to 1913, the working class did make advances, by militant struggle largely under the socialist banner, in obtaining fruits of industrial progress.

John Kenneth Galbraith, a progressive economist, while accepting the value of Piketty’s work has some criticisms.

Firstly, he rejects that the tax records on which Piketty relies are the only way to gather long term records — Piketty’s most complete records are French estate tax records dating back to shortly after the French revolution in 1789. Galbraith has used US payroll records back to 1920 to come to similar conclusions about growing inequality in America.

Galbraith also has difficulties with Piketty’s use of the term ‘capital’. He suggests that Piketty conflates physical capital equipment with all forms of money-valued wealth, including land and housing, whether that wealth is in productive use or not. Piketty’s measure of capital, therefore, is not physical but financial: ‘The problem is that while physical and price changes are obviously different, Piketty treats them as if they were aspects of the same thing.’ Galbraith suggests that (apart from World War II when the UK and Europe did suffer significant physical destruction) it was changes in the market value of wealth that reduced inequality between 1914 and 1950. He writes: ‘A simple mind might say that it’s market value rather than physical quantity that is changing and that market value is driven by financialization and exaggerated by bubbles, rising where they are permitted and falling when they pop.’

Galbraith also wrote:

The evolution of inequality is not a natural process. The massive equalization in the United States between 1941 and 1945 was due to mobilization conducted under strict price controls alongside confiscatory top tax rates. The purpose was to double output without creating wartime millionaires. Conversely the purpose of supply-side economics after 1980 was (mainly) to enrich the rich. In both cases, policy largely achieved the effect intended.

That gives rise to another issue embedded in Piketty’s work: the role of policy and politics.

As John Cassidy wrote in The New Yorker in reviewing Piketty’s work:

The Great Depression wiped out a lot of dynastic wealth, and it also led to a policy revolution. During the nineteen-thirties and forties, Piketty reminds us, Roosevelt raised the top rate of income tax to more than ninety per cent and the tax on large estates to more than seventy per cent. The federal government set minimum wages in many industries, and it encouraged the growth of trade unions. In the decades after the war, it spent heavily on infrastructure, such as interstate highways, which boosted GDP growth. … Inequality started to rise again only when Margaret Thatcher and Ronald Reagan led a conservative counter-revolution that slashed tax rates on the rich, decimated unions, and sought to restrain the growth of government expenditures. Politics and income distribution are two sides of the same coin. [emphasis added]

Piketty himself acknowledges this:

A quick glance at the curves describing income and wealth inequality or the capital/income ratio is enough to show that politics is ubiquitous and that economic and political changes are inextricably intertwined and must be studied together.

US inequality is now close to the levels of income concentration that prevailed in Europe around 1900-10. History suggests that this kind of inequality is not only useless for growth, it can also lead to a capture of the political process by a tiny high-income and high-wealth elite. This directly threatens our democratic institutions and values. [emphasis added]

The point that the progressives and Piketty make is that government policy plays a major role in economics generally, and in controlling inequality in particular. If government does not fulfil that role, then, as Piketty suggests, it leaves the way open for the economic elite to also capture the political process.

The major criticism of Piketty is for his policy conclusions: he recommends higher marginal tax rates for high incomes and a global wealth tax, although conceding that his recommendations may be utopian. His more vocal critics have picked this up and derided his policy proposals. Even supporters have suggested alternative approaches: Galbraith suggests that a large rise in the minimum wage in America would have the effect of reducing the amount available for the accumulation of wealth at the top levels; others have suggested more government regulation can have the same effect.

What do you think, so far?

Who’s right?

Back in April, Senator Brandis wrote an article (reported on the ABC) in which he claimed that although he believed humans were causing global warming he was ‘really shocked by the sheer authoritarianism of those who would have excluded from the debate the point of view of people who were climate change deniers’. He went on to say that people who think the science is settled are ‘ignorant and medieval’.

Adam Bandt for the Greens responded:

“If someone said ‘two plus two equals five’, would you insist on giving them as much airtime in the media as someone who said ‘two plus two equals four’.

The science community is now essentially speaking with one voice. To say someone without science training can somehow simply on a free speech basis say that they’re all wrong is a very feudal way of thinking.”

These statements raise concerns regarding climate change and free speech. But there is another issue embedded in them which is the one I want to explore: the role of experts in shaping government policy.

Human society has always used experts, even if early on they were identified by experience, status or age. In our modern society technical and scientific expertise has grown exponentially as we have become more dependent on science and the technology arising from it. That has also been reflected in the legislation going through our parliament. The first parliament in 1901 passed 17 acts in total, including matters of post and telegraph services, and distillation, the only two which may have required some expert advice. Between 2008 and 2012 an average of 220 acts per year was passed including on such matters as offshore petroleum, greenhouse gas storage, nuclear terrorism, road safety and higher education, each of which, among many others, would have required expert input.

While expert input may seem essential for some issues, governments, unfortunately, also use experts to avoid responsibility for their decisions. They establish an ‘expert’ committee and then claim their decision is based on the committee’s advice or evidence, thereby implying they essentially had ‘no choice’ in their final decision.

That leads to the crux of the problem: that the use of experts is inherently undemocratic as the expert becomes an ‘authority’ presenting decisions of public policy, whereas democracy is meant to be based on keeping ‘authority’ in check.

The ultimate outcome can be the rise of a ‘technocracy’ — government by technocrats, or experts. Underlying the technocrat approach is the belief that expertise and knowledge will lead to the best rational decision, one that cannot really be questioned because non-experts, including politicians, are not qualified to judge what the experts are saying.

In the 1990s there were fears that the European Union (EU) was going that way largely due to the regulations being made by the European Commission. While the regulations may have been based on the best technical and scientific advice, they were often met by resistance in some nations of the EU, both by politicians and the public. This meant the advice became politicised, but that helped slow the descent towards a technocracy. Despite that, there is a history of experts determining policy in a number of northern European nations, in particular Germany.

A problem for politicians, especially as regards scientific advice, is that scientific results can contain a number of uncertainties. Although this is part of normal scientific enquiry, and promotes further research and refining of theories and models (such as in the current climate change science), it does not necessarily provide a solid basis for decision making. Put simply, politicians often need to act before the science is conclusive.

There is also growing distrust of experts among the populace, for a number of reasons: the political use of experts to justify disputed decisions; the problems that have arisen from following experts previously (that is, the introduction of technology that has initially enhanced our lives but subsequently led to environmental or social problems); fears of the potential rise of a technocracy and the loss of democratic power, and a more educated and informed populace that is better able to question.

On the other hand, the public is reliant on science for risks we face that our normal senses cannot perceive, such as radiation or the detection of the ozone hole in the 1980s. You might say it is a ‘love/hate’ relationship we have with the experts.

Of course, governments and politicians rely on other ‘experts’ outside the technical and scientific areas, such as in economics and education. Neither of these can be called sciences in the sense that it is rare that they can reach irrefutable conclusions, such as two oxygen atoms and a carbon atom making up carbon dioxide. Economics claims to be a science but given its predictive history (an ability of solid science) it can hardly claim that title. We have only to look at economic forecasts and how often they have to be changed, or how often they do not foresee the next recession (when did they ever foresee one?). Why would the public put their faith in such experts?

The other claim the public often rejects is that these ‘experts’ are the sole repository of expertise in their field. Individuals can also be experts, particularly as regards local knowledge. A classic case occurred in England after the Chernobyl meltdown in 1986. Radiation was detected in Cumbrian sheep fields but the scientists said that this would quickly be ‘immobilised’ in the soil and pose no significant danger. They were wrong on three counts:

1. their advice related primarily to alkaline clay soils but the Cumbrian area was acidic peat;
2. they failed to consider that the radiation could enter the human food chain from sheep grazing on the local grasses; and
3. the farmers also had detailed knowledge of local changes over a number of years and eventually the scientists were forced to concede (and accept the local knowledge) that the radiation came not from Chernobyl but the nearby Sellarfield nuclear reprocessing facility.

This raises another issue, that when expert advice enters the public arena it can be judged not by what it says but by a number of other criteria, including whether or not it concurs with local knowledge which, as shown in Cumbria, can also be a valid source of expertise.

So the question becomes if we can’t live with them and we can’t live without them, what do we do?

One approach is education and awareness, making the public more aware of research and its findings. This requires experts participating in public fora, airing their research in the media and engaging in public debate. The Australian National University (ANU) has a specific policy on this and states that it will support its academics in public debate if the policy is adhered to. The preamble states that:

Academics have an obligation to present their expertise outside the strictly academic context: they are expected to inform public debate from the perspective their scholarly expertise brings to an issue.

But the policy notes:

In public debate, such as opinion pieces or columns in the media, it is generally not possible to provide a detailed scholarly justification of the position adopted, nor to present every possible perspective on an issue: but it is expected that the position adopted should be defensible and that justification for it should be available or able to be given at a level which would be of acceptable standard in the field of scholarship.

The latter statement suggests one difficulty for experts involved in public issues. They cannot necessarily explain all the intricacies, uncertainties or assumptions that underlie their position. Overseas research suggests that academics draw a line between internal discussion (within their discipline) and public discussion of their discipline, feeling, particularly in scientific areas, that the public has limited competence in dealing with their detailed findings.

The ‘public competence’ may actually be a public questioning because many aspects of expertise are contested and it can take time for experts to reach a consensus. In such situations, the scientific or other expertise is not really adding to public understanding but perhaps only confusing it, and it does not provide certainty to the public nor provide the level of guidance necessary for decision making by public officials and politicians.

While governments claim to seek ‘evidence-based’ policy, in my 30 years as a public servant this was just as often ‘policy-based evidence’ — that is finding the evidence that will support the position the government intends to take. That was an approach I had to adopt on a number of occasions (for governments of both persuasions). So divergences in expert opinion can also mean their advice is used to justify pre-existing positions, just by picking which expert agrees.

There are also calls by some for greater public participation in technical and scientific debates and, particularly, in framing the policy arising from such debates. This is relatively new, in the sense that the dominant form of participation has usually been after the policy is decided, in implementing the policy or taking actions arising from it, such as reducing household energy usage as one step to assist in limiting greenhouse gas emissions.

If there is greater involvement, how does the public judge what the experts are saying?

Such judgments will inevitably be coloured by local experience: for example, support for climate action in Australia was at its highest during the drought from 2002 to 2006, a time when it could be said that local experience seemed in accord with what the experts were saying. But as we have seen, that local experience varies over time and with it the judgments the public makes. Local knowledge also does not help in understanding issues that may be relevant on a much wider scale — which is one reason global warming is a difficult concept to grasp when there are no immediate signs of it in one’s own locality.

Politicians face the same problems. A research paper prepared by the Parliamentary Library in October 2013 addresses how lay persons, including politicians, judge technical and scientific knowledge. One means is ‘social expertise’, our general understanding of our own society and the role of the various players in it: it allows us to make judgments about who we agree with rather than scientific judgments on what ought to be believed. In making such judgments the paper goes on to suggest the following questions should be answered:

  • Can I make sense of the arguments?
  • Which expert seems the more credible?
  • Who has the numbers on their side?
  • Are there any relevant interests or biases?
  • What are the experts’ track records?
The paper concedes that even answering these questions can still be problematic but suggests that using them together can improve their strength and reliability. They are questions that can be used by politicians when assessing expert opinion coming before parliamentary committees.

If our politicians actually used this approach there would be no question in Australia regarding anthropogenic global warming.

Even with the best advice and with understanding of the expert knowledge, or at least judgments about it, the decisions to be made often require much broader considerations. There are value or moral judgments to be made in deciding policy. Even if the experts are all pointing in the same direction, will a policy arising from that advice be right, fair and just? Economic and social implications also come into the argument, which is where Abbott won the debate on climate change when in opposition.

Additionally, even when expert advice is accepted that does not mean there is agreement on what should be done. There is often much more debate about what measures should be taken and that depends on many other issues and power relationships.

The politicisation of expert advice, while creating some problems, is as it should be, for without that we would become a technocracy. The outcomes and policies arising from expert advice still need to be debated publicly in the political sphere.

Finding the expert who is right becomes not just a matter of the research they have undertaken, but of their standing and acceptability — both socially and politically; of whether following their advice will produce fair and just outcomes; and of how their advice plays out politically between competing interests. So, no matter how technically or scientifically good the advice, it is likely that differences will remain, not so much regarding the expertise, but in terms of who to believe and what to do about it.

What do you think?

The speech I would like to hear

Last year on TPS I posted a blog ‘What happened to leadership and conviction?’ and bemoaned the fact that modern politicians are so poll-driven, rather than seeking to drive the polls by driving the policy debate. This year in a number of posts, ‘Whither the Left’, ‘Bringing Gross National Happiness into play’ and ‘The wonderful world of the economic rationalists’, I have also raised alternative approaches for Labor. (This piece can also be considered as Part 4 of ‘Whither the Left’.)

I thought rather than simply be critical, or make suggestions from the sidelines, I should put my words where my mouth is and actually come up with a speech I would like to hear.

Here is the speech I would like to hear from Labor as a step towards government. I am not a speechwriter, but this provides the gist of what I think should be said.

It is basically a political speech that could be used by Labor, generally taking the more moderate, more pragmatic approach to the issues raised in the earlier articles. It does not go into policy detail (that will have to come later) but can be seen as the philosophical introduction to the actual policies. It aims, as I have suggested previously, at changing the tenor of the economic debate.

Leading the way

Good evening to all of you, the members of this great nation, Australia.

We are each a member of a single nation, and like members of any organisation, we share its good times, we share its hard times, and pull together through thick and thin.

We have a great nation. It can and should be better.

We founded Australia as a nation in 1901 based on a great democratic tradition that brought ordinary people into the political process, even into the Parliament itself.

We did not have elites born to rule us and we did not need them. We described ourselves as the ‘land of the fair go’ and believed every one should have the opportunity to live the life they chose.

Most importantly, we believed everyone was equal. Anyone could aspire to be a Member of Parliament, or even Prime Minister.

Anyone could aspire to the vocation they wanted, based only on merit, not their background.

Everyone could aspire to create a better world for their children.

Where we were born, or to whom we were born was not meant to be a consideration.

At different times, not everyone was included in the vision but over time our vision of Australia became more inclusive. Our forebears knew then, as we know now, that our nation can always move forward, always be better than it is.

Now is one of those times when we need to take another step forward to aspire to an Australia that is greater, fairer, and more caring of its people.

It is time to address some of our current weaknesses and move forward. Not ignore them — as the current government is doing — and drift backwards, losing the gains our grandparents made, abandoning the aspirations of the nation.

There is more than enough evidence that there are still areas of weakness in our social and economic institutions.

Our economy is losing low-skilled jobs, so education and training, and re-training, are becoming more important, not less important.

Our population is ageing, so more needs to be done to encourage active ageing, allowing people to continue to contribute to our society, whether that is in employment or volunteering. The only answer the current government has is to increase the pension age.

We are losing manufacturing industries and more needs to be done to encourage the industries and jobs of the future. The Coalition government simply watched it happen. At the last election, it promised a million new jobs knowing full well that was no more than normal growth as it had been for the previous decade — it was a promise to do nothing, which is exactly what the government did.

And despite our nation increasing its wealth for a generation, inequality in our communities has increased. That needs to be addressed, not ignored, as this government would have you believe.

I know some will react by saying nothing can be done unless we have a strong economy.

That is self-evident.

But what is the point of a strong economy:

— if school children are being left behind because their schools do not have sufficient resources

— if people are dying because our hospitals are overcrowded and under-resourced,

— if people are working but still earning barely enough to survive,

— if our nation is in flames from the effects of climate change.

Every year we delay addressing these things, is another year that will add to the cost of rectifying them in the future. Another year that will actually weaken our economy.

Our future economy will not be strong if we do not have enough tradespeople and graduates coming out of our TAFE colleges and universities.

Our future economy will not be strong if people are sick for longer because we failed to provide adequate health services.

Our future economy will not be strong if we are spending more and more on the ravages of bushfires, of more frequent droughts, of rising sea levels, because we did nothing now.

A strong economy also needs quality infrastructure. The Coalition will cry ‘debt’, just like the boy who cried wolf. But it is the same type of debt that you go into when buying a home. You finish up with an asset that is worth more, that can be passed to your children. It is the same for the nation. If we have to borrow to provide essential infrastructure, it is for the benefit of the nation as a whole and enhances our nation both for us and for future generations. Quality infrastructure boosts national productivity and national wealth, and that flows into higher government revenue to improve education and health and all the other services we need.

A strong economy requires the merging of the work of our scientists and researchers with that of enterprises and entrepreneurs to improve products, create new products, and new processes for producing them. That will not happen if, like the current government, we continually reduce funding for research.

It will require us to identify and improve the services we can provide to other nations, just as we already provide educational and engineering services.

A strong economy requires skilling our workforce and having managers working smarter. It requires high quality students coming into the workforce, bringing new skills and new ideas. It requires all parties listening and sharing and working together, at the enterprise level, the industry level and nationally. And in these times, internationally.

It requires people being supported in their work and feeling a sense of achievement in what they do. From the highest to the lowest paid, every role is essential — a CEO relies on a cleaner as much as an airline pilot relies on an aircraft maintenance worker.

It requires that those who are not working have other ways of maintaining their self-esteem. Without that they will not become productive workers when the opportunity arises, or effective volunteers if they are already retirees. Each requires that sense of belonging and of being able to contribute to our society.

What the other side won’t tell you is that the economy is about people. An economy is not something that exists in a vacuum. It is the product of the effort of the people.

There is no economy without you and for that reason you should feel part of the economy.

And people deserve to benefit from their part in maintaining our economy. They need to feel they are receiving a fair share of the national wealth they have helped create.

A strong economy should provide for the people. They should feel included and secure. They should know that government will help in those times when they need help; that the government will help when transitions are taking place in our economy and in our lives as a community.

A strong economy should create wellbeing for all of our people. People should feel happy and satisfied, not just in their work but in their lives. That is the ultimate aim of a successful economy. And that cannot be measured just in dollars and cents.

At present Gross Domestic Product (GDP) is the main measure of our economy but it simply adds together the value of all the products and services we provide.

For example, a house that is destroyed in a bushfire adds twice to the GDP: once when it was first built, and again when it is rebuilt after the fire. But GDP takes no notice of the loss of that house, nor the devastating impact that loss had on the family that occupied it.

GDP also takes no account of damage to the environment — although the costs of rectifying that damage will be considerable. It takes no account of the depletion of our natural resources. Yes, some of that is necessary for our economy but we also need to be mindful of future generations and what resources we will be leaving for them. We must find the right balance between the economy and our environment, and to do that we need to look at our economy differently.

It is time we included other measures of our economic progress, because, in reality, GDP only measures our economic activity — GDP would count the money spent rectifying environmental damage as a plus, something that adds to GDP. That seems a strange way to measure the strength and sustainability of our economy!

There are already new measures available and being developed. Some focus on wellbeing. Some take account of the costs of achieving GDP growth.

My government will examine these and see which we can use in Australia, which will genuinely measure our progress as a people and as a nation.

To make the economy work at its best we need a strong people bound together. People are not bound together by a philosophy that encourages greed or promotes every man and woman for themselves. We must maintain our traditional ethos of the fair go and of helping a mate.

I believe Australians are bound together by our sense of fairness, by our sense of equality. We need to build on that.

As a government we will also be honest with you and explain what we intend doing and more importantly, why we are doing it. It is true that sometimes government decisions can cause difficulties for some, although of benefit to the nation as a whole. If we all understand why such a decision has to be made, then both the government and the people can ensure that our sense of fairness comes into play to support those who lose out until the wider benefits become apparent.

We will bring a different focus to the role of government:

We will focus on food security, not just agriculture as an industry. That will include underpinning the food security of other nations through our agricultural exports.

We will focus on our social strength, not just social security as a means of making welfare payments. We will strengthen the role of communities and people in supporting their neighbours.

We will focus on wellbeing, not just health. We will include active ageing and the vitality of our communities.

We will focus on the best use of our workforce, not just employment. That means skilling our people, but also encouraging innovative management approaches and innovative businesses, both small and large.

We will focus on environmental sustainability in which climate change is a critical but not the sole part. We will include what needs to be done to maintain our river basins and ground water so that communities and enterprises will also have access in the future.

We will focus on the breadth of our economy not just individual industry policies and ensure an approach that adds to our future strength.

We will focus on energy security. That will mean looking across all our energy sources, not individual sources and their associated industries in isolation.

But our main focus will be you, the members of our Australian nation. All of our decisions, including our economic decisions, will be made against the underlying principle of what can best improve the wellbeing of our people.

We have reached this point because of the inaction and wasted opportunities of previous Coalition governments who believed in so-called ‘trickle down’ economics: the belief that greater national wealth would benefit all — but that has not always been the case. They provided tax cuts instead of providing infrastructure for our future, for our children and our grandchildren. Yes, we all like tax cuts but if they cost us better schools and hospitals, if they cost us the NDIS and a future-proof fibre network, are they worth it? It only makes it more difficult for our future generations to maintain a strong economy and a strong society.

We must always remember that the decisions we make now are not just for ourselves but for our children, our children’s children and their children. We want them to enjoy life in Australia as we have done and not pass to them something in which they find only sacrifice to save the nation. If we do not take the first steps now that is what they will face.

We may not have time to complete the job but at least we will be able to say to future generations, we started the job, we did our best, and we have strengthened our nation enough for you to build on and continue making it a great nation, a nation always moving forwards, that can hold its head up in all the councils of the world.

We can achieve this. Labor will lead the way.

We will … [then follows the policy detail.]

What else can you add to the speech?

What else should a left-of-centre party (Labor) be saying to win votes?

What can be borrowed from the radical Left?

What do you think?

Bikies, Bullying and Bigotry

It takes a certain amount of self-belief and trust in yourself to get to the top of any profession. Some knowledge also helps. However some people who rise to the top of various professions seem to be able to retain a sense of humbleness and a keen interest in their fellow humans — others don’t. In recent years we have seen almost every ALP government in Australia consigned to the dustbin of history, to be replaced with various forms of conservative government. While ALP governments are not perfect and there has been extensive discussion here and elsewhere as to how the ALP can revitalise so they can re-attract the voters that have ‘swallowed’ the conservatives ‘you can trust us’ campaign, let’s look at the mindset of two conservative Governments in Australia and their treatment of members of their own community.

Did you hear the one about the seven friends that went to a bar? They were arrested. No — it’s not a failed attempt at humour — it is an actual event that happened on November 1st 2013 at Yandina (which is located near the Sunshine Coast in Queensland). The reason they were arrested was that they are alleged to have connections with an ‘outlaw’ motorcycle club.

Under Queensland’s Vicious Lawless Association Disestablishment Act (2013) — also known as the VLAD Laws — it is illegal for three or more members of an organisation declared illegal under the VLAD Laws to be in the one location at the same time. Originally, five of those having a drink were arrested, later two additional people were prosecuted as ‘police said they found criminal motorcycle gang “paraphernalia” at the homes of the two men’, who are alleged to be members of the Rebels Motorcycle Club.

All of the Yandina Seven — as the media has named them — have subsequently spent up to three months in ‘solitary confinement’ in Queensland prisons where they were effectively locked up for 22 hours a day. Their trials are currently scheduled for November 2014. Regardless of the ‘detection’ of ‘motorcycle gang paraphernalia’, most of the seven arrested were related and while it is possible that they were discussing how to perform illegal activity — they could have also been discussing the upcoming first birthday of the child of one of the men involved. The VLAD laws do not require the police to prove that people were planning covert or illegal activity prior to arrest and imprisonment.

According to the explanatory notes for the VLAD legislation:

The primary objective of the Vicious Lawless Association Disestablishment Bill 2013 is to:

disestablish associations that encourage, foster or support persons who commit serious offences; and

increase public safety and security by the disestablishment of the associations; and

deny to persons who commit serious offences the assistance and support gained from association with other persons who participate in the affairs of the associations.

The structure and operation of these criminal associations poses particular challenges to law enforcement and the criminal justice system. The association often provides members with the impetus, support and infrastructure to further their criminal activities and their violent behavior.

While the stated intent of the VLAD Laws is to ‘disestablish associations that encourage, foster or support persons who commit serious offences’ is a crime against the English language in itself, there is some evidence that the law is being used to cover a multitude of ‘sins’. This account of the Queensland police arresting someone who was using a former motorcycle clubhouse for another business is disturbing. Will they be arresting the New South Wales State of Origin team if they beat Queensland this year so that the threat to Queensland life can be ‘disestablished’?

Even the Courier Mail is reporting that Newman is being accused of bullying the judiciary, over bailing people rather than imprisoning those accused of offences under the VLAD Laws. The alternative to bail is ‘solitary confinement’ — the fate of the Yandina Seven.

It is now history that Campbell Newman resigned as Brisbane’s Lord Mayor shortly prior to the last Local Government elections ensuring the chosen replacement Graham Quirk did not have to face a by-election to assume the role of Lord Mayor. Newman became the ‘Party Leader’ of the LNP without a seat in the State Parliament and subsequently won the 2012 Queensland election with a massive majority.

Within 100 days of the state election, Independent Australia was comparing Newman to famed Queensland Premier Bjelke-Petersen, who was never cleared of corruption charges. While it could be claimed that Independent Australia was no friend of conservative political parties, The Australian, clearly had similar concerns with Newman’s maiden speech in Parliament.

Queensland’s Attorney-General is lawyer Jarrod Bleijie who at the age of 32 has been a member of Parliament since 2009. He is responsible for the maintenance of law and order in Queensland — including introducing the VLAD Laws and appointing judges in Queensland. Since the 2012 election, one female and 17 male judges have been appointed in Queensland. Bleijie seems to think that confidential conversations between he and the judiciary are suitable for media release — with support from Newman. Justice McMurdo has a greater sense of proprietary it seems.

The Sunshine Coast Daily looks at the over-regulation of the VLAD Laws, suggesting

Many would argue the strangest new set of laws belongs to Kawana MP and Attorney-General, Jarrod Bleijie, who introduced the Vicious Lawless Association Disestablishment Bill 2013 or VLAD law to clamp down on rogue bikies

and expands the issue by looking at the Federal Attorney-General’s comment that bigotry is acceptable. The paper points out it may be ‘appropriate’ to denigrate fair skin aboriginals as Andrew Bolt did, but it is illegal to let a helium balloon go on the Sunshine Coast or, rather than talking to your neighbour, you can send a formal notice to remove the tree branch that overhangs your fence.

On a serious note, the Federal Attorney-General did claim Australians have the right to be bigots. While the Federal Government’s first law officer may believe that bigotry is acceptable, others don’t, including The Age and Amy Stockwell who writes for Mamamia, a website that describes its purpose as ‘absolutely everything is up for discussion: from pop culture to politics, body image to motherhood, feminism to fashion’, explains:

Importantly, the judge found Bolt had no defence under section 18D because the articles were not written in good faith and “contained errors of fact, distortions of truth and inflammatory and provocative language”.

On hearing the decision, Andrew Bolt immediately declared it “a terrible day for free speech in this country”. Bolt’s supporters tended to agree.

In August 2012, Tony Abbott made a pre-election address to the conservative think-tank, the Institute of Public Affairs, and committed to repealing the provisions of the Racial Discrimination Act that allowed Bolt to be sued.

It seems that this is one promise Tony Abbott intends to keep.

In the 1970s, a Detroit radio announcer, Tom Clay, explored what bullying and bigotry has achieved in the middle of the 20th Century.

The point demonstrated by Tom Clay is that bullying, bigotry and hatred are learned behaviours. In a country where politicians seem to find a benefit in being ‘practising Christians’ and Abbott wears his Catholicism as a badge of honour, bullying of select groups in the community and the promotion of bigotry seems to be a permitted activity. So much for the ‘do unto others as you would have them do unto you’ tenet in the Bible, the source moral textbook for all the different ‘brands’ of Christianity from the Catholics through to the ‘born again’.

Some Catholic Clergy have a phrase for those who religiously attend church (pun intended) on a Sunday and then practice completely different beliefs for the remaining 167 hours a week — they are ‘one hour a week Catholics’ (the typical length of a Catholic Sunday Mass). Abbott claims to be a practicing Catholic, Newman claims to have faith and while he isn’t, his immediate family are practising Catholics — yet both of them lead governments that are attempting to return their communities to a time where bullying, bigotry and hatred are acceptable learned behaviours.

Is this a case of politics alters the moral compass of these people or that they will say and do whatever is necessary to gain a few more votes?

What do you think?

Letter to Bill Shorten - part 2

Here is the second part of a letter to Opposition Leader Bill Shorten, written by an ardent Labor supporter, Ad Astra. 

The Hon Bill Shorten, MP Leader of the Federal Opposition 
Dear Mr Shorten

Health and disability 

Labor has a proud record in health care, one acknowledged by the electorate. It introduced Medicare, which LNP governments so far have been too timid to dismantle, so popular has it been, although the Commission of Audit would have it emasculated. Last term it introduced its groundbreaking and highly applauded Disability Care, which the Commission of Audit would slow down, leaving the disabled waiting yet again. 

Australia has one of the best health care systems in the world. Its maintenance and improvement is Labor’s task. The LNP’s focus is on the sustainability of funding for health and disability care, a laudable enough objective, but we know ‘sustainability’ will be used as a lever for cuts to services, as the Commission of Audit so vividly exemplifies. 

Labor should be formulating how it would sustain funding, rather than harping on LNP cuts. It should be leading the way, but so far we have seen almost no proactive leadership on health from Labor since the election. 

Aged care, dementia care, disability care and hospital care are becoming major areas of concern. The need for, and the cost of supportive services will rise inexorably. Labor must stress the importance of basing our health care system on first-rate primary care that offers emergency care, preventive care and chronic illness management via the nation’s well-trained general practitioners. This nation must prepare for these areas of escalating cost now, but not through counter-productive penalties such as a co-payment on bulk-billed services. 

Recommendation: That Labor seizes the initiative on health, aged and disability care, and not only widely promulgates its plans for enhancement, but also its detailed plans for sustaining funding in the decades ahead. It must take the lead in this, its traditional area. 


Here is another area where Labor has a fine record, which is consistently acknowledged by the electorate. Its Gonski initiative was widely applauded, so much so that the LNP was forced to endorse it pre-election, only to seek to dilute it post-election to suit its ideological position, and delay it, purportedly for budgetary reasons. Labor has always insisted on enabling education for all who might be capable of benefitting from it, be it at in the pre-school, school, tertiary or trade sectors. The LNP sees education as being for those who can pay for it, for the ‘better class of kiddies’ who deserve it most. The Commission of Audit would have the Gonski reforms disabled or even abandoned, and education handed to the states. Labor must counter this, knowing that education for all enhances the individual, increases productivity, and lifts the nation up. 

This nation simply cannot afford to fall behind its Asian neighbours. 

Recommendation: That Labor re-asserts its preeminence in education, insists on the full implementation of the Gonski recommendations, and fashions a funding schedule that will enable this, even if that requires additional levies or taxes. 

Taxation and transfer payments 

Labor has traditionally been sympathetic to the needs of the elderly, the retired, the disabled and the less well-off. It has supported and increased pension payments and other benefits. The cost is projected to rise inexorably. Labor must develop a plan to sustain these benefits where they are justified. That will not be easy. It will almost certainly require stricter means testing so that those who most need support receive it, and those who don’t, do not. Moreover, increased taxes are certain to be needed. Instead of pretending that Labor can manage to support transfer payments without tax increases, it should advocate increasing direct and indirect taxes. It should not play a political game by opposing discussion of GST changes. Whilst acknowledging that the GST is a regressive tax, which most hurts the less well off, it cannot be beyond the wit of Labor to propose changes that do not hurt the poor. For example, a GST on food, education and health care could be offset by a graduated discount system for those below certain income levels. 

Balanced economists identify PM Howard’s use of the deluge of revenue during the mining boom to buy votes through middle class welfare and tax cuts as a major cause of our current difficulties. Labor should make this clear whilst acknowledging its own contribution to the escalation of welfare. It should acknowledge that structural defects in the federal budget simply must be remedied. 

Labor ought to be echoing Joe Hockey’s mantra that the age of entitlement is over, but focus its attention on corporate welfare, welfare for those who do not need it, and other tax refuges of the wealthy, specifically negative gearing. Instead of shrinking from addressing this thorny issue, it ought to have the courage to insist its enormous cost to the budget be exposed, and that steps be taken to phase it out gradually. Superannuation needs graded boosting to 15% so that the less well-off become less reliant on the aged pension. Superannuation tax concessions that unreasonably favour the wealthy should be reduced and gradually phased out. Increasing the pensionable age, and taking steps to take into account the value of the family home and other assets in allocating a pension, must be considered. Let’s not play political games with tax issues, even if the LNP does. They are too crucial to be the subject of point-scoring skirmishes.

Recommendation: That Labor takes the lead in addressing the structural defects in the nation’s tax and transfer system, and insists on open debate to find lasting solutions.


Labor ought not allow Tony Abbott to brazenly steal the mantle of ‘the infrastructure PM’. Labor has always given due prominence to infrastructure, and should ensure that its strong record and its future commitment to infrastructure is widely publicised. Anthony Albanese has been a vocal advocate for the infrastructure this nation needs. Labor should avoid the pointless ‘road versus rail’ debate that the LNP seems to enjoy. 

Recommendation: That Labor re-asserts its preeminence in infrastructure development and wrests the initiative from the Coalition and its ‘infrastructure’ prime minister.

Public debate 

The electorate’s perception of politicians is governed mainly by their public utterances inside and outside of parliament. 

Question Time, even for those who do not have the time to watch it directly, is publicised on every TV and radio outlet. Perhaps more than anything else, QT has weighed down politicians with the unseemly cloak of adversarial discord, abuse, anger, shouting, lies and deception. Politicians are seen simply as ugly point-scoring street fighters. Yet politicians ought to be admired and respected. The fact that they rate with used car salesmen and journalists as the least respected professionals shows how lowly they have sunk in the public’s estimation. This demeans our democracy. 

Labor should take the lead in elevating public discourse. In QT, instead of always seeking to score points that will be seen on the 6 o’clock news, why not ask questions of profound importance to our nation, and ask them in a sincere yet inquisitive fashion, free of angry rhetoric, nasty innuendo and finger pointing. If Labor must embarrass the government, ask penetrating questions that probe weaknesses in policy, dishonesty, lack of clarity, inefficiency, and malign intent, and do so benignly with everyday words uncontaminated with venom and anger. In my view, that would have a more shocking effect on the government and a more enthusiastic acceptance by the electorate. It would contrast with the angry outbursts and the sarcastic words we see from LNP politicians almost every day. 

Labor spokespersons should talk as statesmen do. They ought to move the standard of discourse from gutter talk to the uplifting language of the statesman and the diplomat. It can’t be that hard. 

This is not to say that exuberance, enthusiasm and passion should not suffuse Labor talk. These attributes are essential, but they can be conveyed without venom, nastiness, sarcasm, rudeness and disrespect.

Recommendation: That Labor reviews all the avenues it has for making public utterances, and refashions them in a way that will garner public respect. This is urgent.


Getting Labor’s messages across will not be easy. It will require skillful ‘marketing’ if I may use that awkward word, of the Labor ‘brand’, another uncomfortable expression. The LNP has been quite brilliant at marketing its brand and framing the political debate. It has used weasel words, words devoid of substance but with a glossy exterior, just as weasels suck eggs dry, leaving only the shiny shell. What Labor needs to do is expose the substance of its progressive policies, and dress it in attractive garb with words that are understandable, appealing and memorable. It can’t be that hard, yet Labor has regularly failed to do this. The result has been that good policies have been misunderstood, or not understood at all, have been poorly ‘sold’, have been countered with ease by Labor’s opponents, and have too often been rejected by the electorate. 

Labor simply must do better. There must be advisers out there who could help Labor fashion its messages, its purposes and its plans in a way that would match Coalition slogans such as: ‘stop the boats’, ‘axe the tax’, ‘we must live within our means’, ‘budget emergency’, and ‘we must all do the heavy lifting’, that have served the LNP so well. 

Words count. Persuasive words garner support. They don’t have to be erudite, only plausible. Framing the debate in a way that advantages Labor is essential.  Labor’s advisors need to study the works of George Lakoff, linguist and cognitive scientist, particularly Moral Politics: How Liberals and Conservatives ThinkThe Political Mind: A Cognitive Scientist's Guide to Your Brain and Its Politics; and Don't Think of an Elephant!: Know Your Values and Frame the Debate -The Essential Guide for Progressives. The insights these works provide ought to be applied to every aspect of Labor’s policy, but perhaps most of all to the economy, which is so central to the electorate’s thinking. 

Recommendation: That Labor takes the initiative in framing the debate on all policy issues.

A final comment 

I could write on and on, covering other policy areas, but this letter is already long enough. 

Suffice it is to say that in the view of this Labor supporter, and I suspect many, many others, Labor needs to make profound changes to its organisation, its governance, its membership base, its financial support, and the way it presents its policies and plans to the public. People like me support Labor because it is built on an ideological foundation stone of fairness, equal opportunity, equity, concern for the less well off and the disadvantaged, full employment, sustainable economic prosperity, and concern for the environment and the pursuit of its sustainability, and because its policies seek to make possible those worthy aims. These progressive ideals contrast starkly with many conservative ideals, which seem to favour the wealthy, disadvantage the poor and the weak, and foster a ‘survival of the fittest’ mindset, with those at the bottom of the pile receiving only the crumbs from the rich man’s table, a phenomenon glorified by the discredited theory of ‘trickle-down’ economics. 

You are the appointed leader. Although the wider membership preferred Anthony Albanese, seeing him as a dyed-in-the-wool Labor man who performs so well in parliamentary debates and public speeches, your colleagues preferred you. So it has fallen to you to resuscitate Labor. You can be assured that this is what Labor supporters desperately want. They will support you as you restore Labor to its proper place in the political spectrum. 

Your task is difficult. You need all the encouragement and help you can get, and you need it from all Labor supporters. The purpose of this letter is to offer that support, and to offer some observations and advice from one who cares deeply about what progressive parties stand for. In Australia, Labor is such a party. The conservatives do not share Labor values. Although the Greens share many Labor values, they are too radical, too uncompromising, and too inflexible in their policies and politics. 

For me, it is Labor. 

Over to you! We have great expectations; we trust you are equal to the task. Help us help you to achieve Labor’s great potential as a force for good in this nation.

Yours sincerely

Letter to Bill Shorten: Part 1

There must be many ardent Labor supporters who would wish to transmit their thoughts to Opposition Leader Bill Shorten about how Labor ought to proceed over the coming months. Ad Astra is one such supporter. Here is a letter he sent to Mr Shorten.

The Hon Bill Shorten, MP Leader of the Federal Opposition

Dear Mr Shorten

I do hope you will find the time to read through this rather lengthy letter from a devoted Labor supporter who embraces the ideals, philosophy, and values of Labor as a progressive political party. I believe it echoes the strongly held views of many Labor supporters. It is written after the disclosure of the findings of the Commission of Audit, but before the Budget.

I believe in fairness and equality for all Australians: equal opportunity in education, universal health, aged and disability care, satisfying employment and income security in a prosperous economy that values environmental sustainability, supported by a safety net for the disadvantaged. I believe in the common good. Thus Labor is my first choice for government.

My background is in family medicine, first as a rural family doctor, then as an educator and administrator. On retirement in 2007, I developed a political website, The Political Sword, which you will see is a pro-Labor site.

It was a great disappointment to me, and to most of the blogsite’s commenters, that Labor lost the 2013 federal election and several State elections before and since. Labor’s recent very poor showing at the re-run of the WA Senate election has enlivened many senior Labor figures, who are now publicly stating that Labor must make radical changes to its organisation and modus operandi if it is to prosper as a political party and offer itself as the alternative government. You have signalled that substantial changes are needed, and specifically you have mentioned loosening ties with the union movement and opening up membership.

Also, Labor must present its message much more credibly, much more coherently, much more convincingly.

With the Abbott Government performing poorly in so many ways, it ought to be possible for Labor to make tactical gains by highlighting the missteps, the lies, the deception, the errors, and the downside to LNP policy decisions and their implementation. Yet, this in itself will not suffice. Labor must present to the public alternative and more appealing policies. So far Labor has failed to do this effectively.

What follows is my assessment of some of the problems that confront Labor, and how they might be addressed.


There is no disagreement that the Labor Party needs more rank and file members. I was astonished to learn that union membership is a prerequisite for working people to gain membership. As less than one in five workers belong to a union, four in five are excluded by this rule. Part of your efforts to ‘disconnect’ from unions ought to be the removal of that rule. While unions remain important in protecting workers’ rights, to assign to them such authority over party membership is now quite inappropriate.

Moreover, Labor needs to actively encourage everyone who embraces Labor values to join. Some time ago I expressed interest in joining the Party in response to a general invitation. But it led nowhere. After a substantial wait, I received an email suggesting that I should contact the local branch. I do not want to attend local Party meetings, although I acknowledge local activities are important. I want to participate via other mechanisms.

I was delighted to learn recently of your intention to reshape and increase membership.

Recommendation: That urgent steps are taken to remove the requirement that union membership is a pre-requisite for Labor Party membership, that membership be open to anyone who endorses Labor values, policies and programs, and that membership be available other than through branch membership, perhaps through a ‘general membership’ category.

Having contributed to political debate via my blogsite for five years, I would prefer to contribute to Labor via direct communication, emails, the Internet, social media, or its equivalent within the Labor organisation. It ought to be possible for the Party to initiate a series of online forums that address individual policy areas, as well as others that focus on the interaction between policy areas, recognising that policy making is dynamic, complex and interactive. Members would then have a chance to express views about policies, ask questions, highlight potential problems, and make suggestions for improvement. Responses could be restricted to members by way of a ‘sign-in’ process. For some matters, throwing them open to community discussion would be appropriate. While acknowledging the value of face-to-face discussions with the cut and thrust that they involve, soliciting opinion online could be a valuable adjunct. Although I am an ardent Labor supporter, I feel an outsider, isolated from mainstream Labor thinking and debate, unable to contribute in any way.

Organisations such as GetUp come closer to engaging people than Labor has done. Without the intelligence, ideas, questions and solutions that members of the public could offer, Labor has only its inner circle to rely upon. Whilst acknowledging the wisdom and knowledge of the inner circle, it can never be a repository for all the ideas, wisdom and solutions that are possible.

Recommendation: That a series of online forums be set up to address policy areas, and publicised to members and to the general community where appropriate, and that input be vigorously solicited.

Union affiliation

This is a vexed contemporary issue. Since Labor depends heavily on union donations and support, and rightly wishes to continue to associate with those who protect workers’ rights and welfare, disaffiliation seems inappropriate. The optics of this relationship governs the way in which the electorate regards Labor. There seems to be a growing unease, even among Labor supporters, that unions have too much influence, too much control over the parliamentary Party, and that the Party is too reliant on financial support from unions. What seems to be needed is more distance between supportive unions and the parliamentary Labor Party, and less influence of unions at Party conferences. Guy Rundle argues that it is the unions that should ‘divorce’ Labor, since, as he asserts, the Party has become too ‘pro-market’, even neoliberal, thereby distancing itself from the central role of unions – to care for and protect workers.

It is a complex relationship that cannot be easily unravelled, but steadily distancing Labor from unions seems to be in the Party’s best interests. As a past union leader, you have intimate knowledge of the relationship, and a stake in it. You are better placed than most to bring about a new relationship that loosens the Gordian knot. To those of us who stand outside the relationship, this now seems both essential and urgent. It is gratifying that you too are now expressing similar sentiments.

Recommendation: That the Labor Party–union movement relationship be examined without delay, with a view to establishing a symbiotic state of affairs that removes the contemporary dependence and ‘control’ of unions over the parliamentary party, especially at Labor conferences.


Even casual observers of politics in this country would be aware of the oppressively powerful influence of factions in decision-making. While factions exist in most parties, they are grotesquely obvious in the Labor Party. They result in decisions that reflect power structures and personal ambition, to the detriment of the Party as a whole. There is no more flagrant example than the recent nomination of Joe Bullock to first place on the WA Senate ticket that pushed Louise Pratt, whom many Labor supporters believed was the best candidate, into the second spot. This was a classic example of what has happened far too often in Labor circles. Those well connected to the most dominant factions, the most powerful, the most influential, those with a sense of entitlement to prominent positions, and in this case certain election, have overridden what is best for the Party and the nation, and what is fairest. This episode has inflicted untold damage on Labor in the West and elsewhere.

The membership must have a greater say in the pre-selection of candidates, and the factions less.

Less recently, but burned into the electorate’s memory, is the dismissal of Kevin Rudd as PM, and his reinstatement after the dismissal of PM Julia Gillard. Those events, born of factional infighting, created the image of a party in disarray, torn apart by warring powerbrokers. While rationalists can advance cogent reasons for each event, the public by and large seems to care little about the reasons, noting only the dissent, the chaos and the disharmony, and therefore mark Labor down as being incapable of governing when it seems to be unable to govern itself. And they do this despite the outstanding legislative work done by Labor in the last six years, most notably its world standard response to the GFC.

Recommendations: That Party officials seriously examine the detrimental influence of factionalism on the Party and its electoral prospects, and radically reduce the harmful aspects of factionalism, while retaining the useful.

That the Party membership be given a prominent role in the pre-selection of candidates for the House and Senate.

It is recognised that this will be difficult because of the almost overwhelming tendency for self-interest to trump the common good, but unless some drastic changes are made and publicised widely, the Party will languish and remain a diminished force in Australian politics. The nation needs a progressive party that values fairness, equality and the common weal. Labor is that party.


It is unnecessary to underscore the destructive effects of corruption on the Party and its electoral prospects. It is often associated with factionalism. NSW Labor has demonstrated this for all to see. It is unnecessary to labour this reality. Perhaps more than any other in the Party, the highly respected and admired John Faulkner has pointed this out, over and again. He has proposed changes to the rules of the NSW branch of the Labor Party. They seem eminently wise.

Recommendation: That John Faulkner’s proposed amendments to the rules of NSW Labor be fully supported, and that these changes be applied throughout the Labor organisation.

Let me now turn from organisational matters to policy issues.

The economy

It has become almost a mantra that a strong and growing economy is necessary to support the type of Australia in which most wish to live. Whilst there is a powerful element of truth in this, Labor seems to have adopted the mantra as a verity, so much so that now its utterances too often resemble those of neoliberal free-marketeers. This type of talk needs to be tempered, lest the electorate begins to believe that Labor is no more than a pale reflection of conservative belief and action. According to opinion polls, Labor is less competent at economic management than the Coalition, despite a mountain of evidence to the contrary. Unless Labor can distinguish itself from the Coalition by demonstrating that its quest for economic strength is for the purpose of providing jobs, prosperity and support for all Australians, not just the corporate elite, it will be seen simply as just ‘Coalition-lite’. The LNP must not be allowed to assume the mantle of savior of the economy – an economy that it deceptively insists has been wrecked by Labor.

Fairness, equality, concern for the poor, the underprivileged, the disadvantaged and the disabled, must be woven into the push for economic strength. It is this balance that ought to distinguish Labor from the LNP, which since its election has shown its ruthless ‘winners and losers’ and ‘winners take all’ approach, and its ‘survival of the fittest’ and to hell with the rest, method of governing.

Labor must be as prepared as the Coalition to tackle the structural imbalances in the federal budget. It is no more than grotesque political spin to suggest that we have a ‘budget emergency’, but we do have structural problems that date a long way back. Negative gearing is one that must be addressed. The Howard/Costello handouts: tax cuts and middle class welfare when there was a revenue tsunami during the mining boom, must be revisited. Labor’s much needed reforms in education, health and disability care, and its productivity-boosting NBN infrastructure, need a sound and completely developed plan to fund these initiatives in the medium and long term. Payments to pensioners will place an increasing strain on the budget, one that would be ameliorated by improvement to superannuation, a superior solution to the harsh recommendations of the Commission of Audit.

Labor needs also to tackle the revenue side of the budget. It must not retreat from a sensible debate about GST, and certainly should avoid the temptation to make political capital out of any suggested change.

Recommendation: That Labor clarifies its economic policies, shows that growth should be balanced against the pursuit of the common good, that raising increased revenue is essential, and then fashions easily understood, appealing, and memorable messages to inform the electorate.

Global Warming

There is no point in arguing the case supporting the existence and extent of anthropogenic global warming. The facts speak for themselves.

Labor has oscillated between triumph and tragedy on this issue. Triumph when Kevin Rudd labelled it “the greatest moral, economic and social challenge of our time” and commissioned Ross Garnaut to produce a report; triumph when he negotiated an ETS with Malcolm Turnbull; tragedy when Tony Abbott overturned Turnbull and set back that initiative; tragedy when Rudd lost his nerve and retreated from his plan, scared of going to a double dissolution; triumph when Julia Gillard insisted she would put a price on carbon; tragedy when she uttered those fateful words “there will be no carbon tax under a government I lead” and the media persistently failed to acknowledge the rest of her sentence; tragedy when Coalition strategists seized upon the word ‘tax’ and created its ‘Axe the Tax’ mantra, one that Labor seemed incapable of countering. Never did we see Labor punch back with ‘Save the Planet – Stop Pollution - Tax the Polluters’, a slogan that is even more appropriate to use right now. Instead we still see supine acceptance of the Coalition’s framing of this issue. Labor must do better than this. It must hammer home the reason for the price of carbon – to reduce pollution, to slow global warming, to save the planet from its devastating effects.

In this and other issues, Labor has not been able to reframe the debate in its favour. It must do this urgently.

Since placing a price on carbon is now being shown to be effective in reducing pollution as well as in generating revenue, I urge you to stick with Labor’s original intent – a price on carbon leading to an ETS – and to vote against the Coalition’s nonsensical Direct Action Plan that economists and environmentalists ridicule as inept – a sham masquerading as effective action. It would be shameful in the extreme to retreat from Labor’s original proposition that a price on carbon and an ETS is the best way of reducing carbon pollution and slowing global warming.

Recommendation: That Labor reinforce its approach to global warming by returning to its initial plan, and vigorously pursue it in the face of opposition from the LNP and vested interests, whose self-centered and ineffectual approach will bring disaster to us all, and will accelerate the deterioration that threatens the planet.

That Labor’s leaders reinvigorate Labor’s media unit with people who can at least match the Coalition in framing the global warming debate. Unless this occurs, the LNP will continue to call the shots, control the media discourse, and leave Labor wallowing in its wake.

There is more to come. You will be able to read the second part of the letter to Bill Shorten next Sunday.

The wonderful world of economic rationalists

The world of the economic rationalists took hold in politics in the 1980s. Their approach, which was discussed in ‘The rise and fall of a shibboleth’, has moulded the world for the past 30 years. Government decisions regarding national economies have been guided by it. International bodies like the IMF, the World Bank and the OECD have followed its tenets. In Australia the Productivity Commission and the Grants Commission have been influenced by it. 

With that pervasive influence, what has economic rationalism actually achieved?

When it was accepted in the 1980s, it was seen as an answer to ‘stagflation’, which had dominated a large part of the 1970s. ‘Stagflation’ was a period of high inflation despite falling or very slow economic growth; it wasn’t really supposed to happen under the predominant economic models of the time. High inflation was usually thought to be a problem resulting from an economy ‘overheating’ (growing too fast), not from when it wasn’t growing at all.

Economic rationalism may have been the answer to stagflation, but it has not stopped the usual market problems. There was a recession in the late 1980s followed by ‘the jobless recovery’ of the early 1990s; then the ‘tech bubble’ later in the 1990s, which burst in 2000; and there was the GFC in 2007–08. Australia came through the GFC better than most western nations because it briefly abandoned economic rationalism and went back to Keynesian economics, where the government steps in with spending to stimulate the economy when private sector activity has slowed. Franklin D Roosevelt had used the Keynesian approach in America during the Great Depression while, at that time, Australia had followed the Bank of England’s austerity approach. But after surviving the worst of the GFC, Australia has slipped back to economic rationalist approaches, and more so since the election of the Abbott government.

The one success that economic rationalism has had is increasing inequality in the distribution of national income. That ‘success’ has spread around the globe.

On the global scale, Oxfam pointed out before the World Economic Forum (WEF) in January this year that 85 individuals between them had as much wealth as the poorest half (3.5 billion people) of the world’s population. Credit Suisse in its Global Wealth Report for 2011 stated that global wealth had risen from USD 203 trillion in January 2010 to USD 231 trillion in June 2011. It also found that there were then 29.7 million adults with household wealth greater than USD 1 million, making up less than 1% of the global population but owning 38.5% of global wealth.

In the USA, average real income increased 116% between 1945 and 2010. The share of national income going to the top 1% increased from 2.5% in 1945 to 19.8% in 2010 (which was down from 23.5% in 2007, largely as a result of the GFC). In that time, the top 0.1% increased their income by 395%. Between 1979 and 2007, the period of economic rationalism, income increased by 275% percent for the top 1% of households, 65% for the next 19%, just under 40% for the next 60% of households; and in those 28 years the income of the bottom 20% increased by only 18%.

In the UK in 1997, the entire bottom 90% of income earners had an average income of just over £10,500. The top 1% had incomes eighteen times bigger and the top 0.1% sixty times bigger. By 2007 the average income of the bottom 90% was just under £12,500 a year, but the income of the top 0.1% was then ninety-five times larger, averaging well over £1m a year.

In Canada, the real median income has barely moved since the 1980s, although in the 1950s and 1960s it was growing fast enough to double every 20 years. In the same time, the top-earning 1% of Canadians have increased their share of national income from 7.7% to 13.8%. In the 1970s the average CEO was earning about twenty-five times the average worker’s wage and in 2010 that had become almost two hundred and fifty times.

In Australia the top 10% of taxpayers had 34.6% of total national income in 1941 — it has not been as high since, but the top tax rate was also much higher then. It fell to 25% between 1974 and 1985 but has since grown again to 31% in 2010. For the top 1% their share was 10.8% in 1941, fell to about 4.5% between 1976 and 1984 and in 2010 was 9.2% (after reaching a peak of 10.1% in 2006 before the GFC).

Recently the ACTU also commissioned a report using another classical economic means of considering inequality — the difference between the labour and profit shares of national income. In the 1990s there was stability between productivity and wages; both productivity and real wages grew at 2.1% each year:

Wages decoupled from productivity in the 2000s. Between 2000 and 2012, productivity rose by an average 1.3% per year, while real hourly labour income rose by only 0.6% per year on average. This meant that labour’s share of national income fell over the decade, and fell quite sharply. In 2000, the labour share was 65.6% — this had fallen to 59.7% by 2012.

Again, this is a global phenomenon:

In developed countries, the share of labour income declined, falling by 5 percentage points or more between 1980 and 2006-07 — just before the global financial crisis — in Australia, Belgium, Finland, France, the Netherlands, Norway, Sweden, the United Kingdom and the United States, and by 10 points or more in Austria, Germany, Ireland, New Zealand and Portugal.

All these measurements are reinforced by the Gini coefficient which has increased in most developed nations since the 1980s. The OECD suggests that France, Belgium and Hungary have managed to maintain their Gini coefficient at about the same level (no increase or decrease in inequality), Turkey and Greece actually managed to reduce inequality, but in all other OECD countries the coefficient has risen, indicating increased income inequality. Out of the 34 nations in the OECD, on a ranking from least to most unequal, Australia ranked twenty-sixth, Canada twenty-fourth, the UK twenty-eighth, and the USA thirty-first. Slovenia ranked highest with the lowest level of inequality, a Gini coefficient of only 0.24, and Chile the worst with 0.49. The US Gini coefficient has risen from 0.39 in 1968 to 0.48 in 2012.

You will see many different Gini coefficient figures because different researchers use differently defined incomes as their starting point — gross, disposable (gross income less taxes) or final income (disposable income plus government transfers). For example, the Productivity Commission found in Australia that, measured by the Gini coefficient, inequality in household income in 2009–10 was 0.426 for gross income, 0.389 for disposable income, and 0.341 for final income. These figures suggest that tax scales and government transfers in Australia do have some impact on inequality, although not stopping it rising over time.

Whichever figures are used, there is little doubt that inequality has increased due primarily to rapid increases in income for the top 1% and, to a lesser extent, the top 10%. The bottom groups have not missed out completely but have been getting a smaller share of the increasing wealth in most nations.

There are other factors, aside from labour income, that contribute to income inequality. A significant one for the top 10%, and particularly the top 1%, has been a large increase in ‘capital and other’ income. The extent of part-time and casual work also has an influence by providing lower labour income. The OECD has suggested that more balanced policy approaches between temporary and permanent employment is one measure to help address inequality.

Another contributing phenomenon in America (and it would be interesting to see if it applies in Australia), has been the loss of middle-ranking jobs, largely due to the automation of routine tasks, not only for manual labour (classified as routine manual work) but by the computerisation of office, sales and administrative work (classified as routine cognitive work). There has been an increase in the number of jobs for non-routine work, both cognitive and manual. The former (cognitive) requires high levels of education and generally commands higher wages, but the latter (manual) involves work such as cleaning, food services, security services, home help, and so on. This is leading to a polarisation of the workforce in America, with more high-paid jobs, more low-paid jobs, and fewer in the middle.

Why are governments, world-wide, still listening to the economic rationalists when it is clear that rising inequality is their greatest achievement?

Government decisions are critical to what happens regarding inequality.

The decisions governments have made, however, since the 1980s, largely at the behest of the economic rationalists, have actually worsened inequality: for example, decisions taken by many western governments to reduce taxes for the wealthy, the argument being that this stimulates growth for the benefit of all. A paper prepared by the US Congressional Research Service, however, found that since 1945 reductions in the top tax rate (from 90% to 35%) in America ‘appear to be associated with the increasing concentration of income at the top of the income distribution’. The paper found no correlation between lower top marginal tax rates and saving, investment or productivity. (As an interesting sidenote, this report was initially released in September 2012 but was then withdrawn at the insistence of Senate Republicans before being updated and re-released in 2013 with no substantive changes.)

So despite continuing talk about the need for lower tax rates to encourage economic growth, it appears this is, in Australian parlance, ‘a furphy’. It has achieved nothing other than to increase income inequality.

And, Tom Conley of Griffith University suggests that governments have actually abandoned the goal of greater equality:

Governments could still ameliorate the negative impacts of market outcomes but, in recent years, they seem increasingly less willing to do so, often arguing that such efforts will impede the growth process.

A different approach is taken by economist James Kenneth Galbraith, son of the more well-known, John Kenneth Galbraith. In his work Inequality and Instability Galbraith argues that economic and social instability is not a result of inequality but:

… rather, inequality is a symptom of the shaky and, in the end, unsustainable foundations of an economy lurching from crash to crash as it maintains a reliance on credit-fuelled stock or asset bubbles that provide massive rewards to select few …

Galbraith and others have pointed out that the levels of inequality in America before the GFC were near the levels before the Great Depression, reinforcing the idea that inequality is, indeed, a symptom of a poorly functioning economic system (often about to break under the strain, if those two examples hold good).

Galbraith also contends that too much attention is paid to the statistical analysis of inequality and not enough to broader social support mechanisms, such as health services, schooling, higher education, social security payments, housing programs, and so on. As government support for such programs declines, as it has generally since the rise of economic rationalists in the1980s, people feel less well-off and less secure, and inequality has more impact not only on those at the bottom of the socio-economic tree but also on the middle class.

Inequality has usually been offset by progressive taxation scales and government transfers, although the OECD argues that ‘government transfers and taxes alone would be neither effective nor financially sustainable’. But it does suggest the need for greater investment in on-the-job training and formal education over the working life as a means of maximising participation in the workforce, and thereby incomes.

Between the Galbraith approach and the suggestions of the OECD, there does appear a way forward, a way to reverse this trend towards greater inequality, and governments need to address these issues:

  • the broader social mechanisms that support families and households, including social security payments
  • the impact of casual and part-time work on livelihoods, on equality and poverty
  • the reintroduction of genuinely progressive tax scales
  • measures of well-being (as discussed in a previous post, ‘Bringing Gross National Happiness into play’).
If such measures are adopted, there is more likelihood that greater equality in income distribution will follow.

But, based on the evidence, the one really big step governments can take to reverse rising inequality is to abandon economic rationalism.

What do you think?